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Avoiding the Poor Post-College-Student Stereotype

Her Campus Placeholder Avatar Alexa von Tobel

What are some ways that I can avoid being “poor” after graduation?

Graduation is an exciting time, but it can also be really scary – whether you’re starting a new job or heading to grad school, you’ll probably be much more independent than you’ve ever had to be before. In particular, you are likely to become financially independent after graduation, perhaps for the first time. I know that figuring out how to manage your money can seem daunting, but I promise that it’s totally manageable if you make smart choices about your money and follow a few important rules.
 

  1. Understand your salary: One of the most important things that you can do is to figure out what your salary really means. You may know that you’ll be making $50,000 a year, but it’s hard to wrap your head around that and understand what that means for your day-to-day lifestyle. Check out LearnVest’s “Understand My Salary” checklist to help you figure out how much money you’ll actually be making after taxes so that you can determine how much you can actually afford to spend and how much you should be putting away into your savings.
  2. Make a budget: Once you understand how much money you’ll really have available, you need to make a smart plan for how you will spend it. Figure out what you can afford to spend each month on rent (experts recommend about 35% of your salary), and find an apartment that is within your means. Create a budget so that you know how much you can spend each month on things like food, clothing, and entertainment, and don’t forget to include important expenses, such as transportation, utilities, and medical expenses.
  3. Learn to live well for less: Sticking to a budget is crucial, but definitely doesn’t have to mean giving up all the things you love. There are tons of ways to save money while still living well and enjoying yourself. Skipping your daily Starbucks run in favor of a cup of coffee that you made at home may seem like a tiny change, but can add up to significant savings each month. No need to survive on Cup of Noodles and Easy Mac to save money, but cut back on meals out in favor of cooking yummy food for yourself at home. It only takes a few minutes to pack a lunch, but going out to lunch every day really adds up! Check your local newspaper and local websites to find fun, cheap (or free!) weekend activities and head out with friends to enjoy some frugal fun.
  4. Understand credit: One of the worst things that you can do is to rack up a ton of credit card debt. Once you’re out of school, your credit score is the only score you need to worry about anymore, and getting into debt spells serious trouble for your credit score. Make sure that you check your credit report and credit score every 4 months, and avoid credit card debt at all costs. If you’ve already accumulated some debt, that’s ok, but start paying it off right away with some help from LearnVest’s “I’m Ready to Tackle My Debt” checklistIf you don’t have any credit card debt, good for you, and keep it up! Remember to pay your bills on time EVERY month, without fail. Pay off as much of the balance as possible, preferably the whole thing, to avoid paying tons of interest.
  5. A credit card in your name is a valuable tool to help you build credit, track your spending, and often accumulate some great rewards, but remember to only spend within your means. If you don’t have a credit card yet, LearnVest’s credit card finder will help you find the one that best meets your needs.
  6. Have an emergency savings fund: Especially in today’s tough job market, it is super important to have emergency savings to fall back on if you ever find yourself out of work or in another financially-difficult situation. I recommend putting away enough money to live on comfortably for 8 to 12 months. Hopefully you won’t need to tap into these savings, but it’s so much better to be safe than sorry, and an emergency fund will help keep you out of debt if you ever do fall on hard times.

For even more tips, check out LearnVest’s full set of advice for recent graduates and our “I Just Graduated” checklist. 

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Alexa von Tobel is the Founder and CEO of LearnVest, the leading independent personal finance website for women. Alexa came up with the idea for LearnVest in 2006, during her senior year at Harvard when she realized she, and most of her peers, had never had any formal education about how to effectively manage their finances. Alexa searched for reliable financial guidance and consistently came up overwhelmed or disappointed. Thus, the LearnVest mission was born – to make trusted personal financial information accessible to millions of women. Since its debut as a TechCrunch50 Company in September 2009, LearnVest has helped over 100,000 women gain control of their finances. The company recently closed a $4.5 million series A round of funding led by Accel Partners (an investor in Facebook, Kayak.com, Glam Media, Etsy and more). Alexa has successfully enlisted the support of an impressive line-up of industry experts for LearnVest’s Board of Advisors including: Lee Barba (Former CEO, Investools/thinkorswim), Ann Kaplan (Former Partner, Goldman Sachs), Catherine Levene (Former CEO, DailyCandy), and Betsy Morgan (Former CEO, The Huffington Post). Originally from Florida, Alexa received an A.B. in Psychology at Harvard College. Upon graduation, she worked as a trader at Morgan Stanley on their Proprietary Trading Desk before leaving to be the Head of Business Development at Drop.io, a venture backed start-up in NYC. She enrolled in Harvard Business School Fall of 2008 only to take a leave of absence to launch LearnVest and pursue her dream of bringing financial literacy to millions of women everywhere. In addition to LearnVest, Alexa is the co-founder of L.W.A.L.A. (www.lwala.org) a 501c3 focused on fighting HIV/AIDS in Africa.