So you’re graduating in a couple of weeks and you’re starting to freak out. You have a timeline of when you’ll be kicked off your parents’ health and car insurance and you are just baffled by the number of decisions that need to be made.
Car Insurance: This is a hard pill to swallow for those of us who were lucky enough to have our parents foot the bill. Everyone knows your insurance is more money if you have a history of accidents or tickets. Discuss either with an agent or your parents to find answers to questions like how much injury coverage you need for a possible accident, whether paying about $4.00 extra a month is worth having the ability to have a rental car if your car is in the shop, or if paying extra a month is worth having accident forgiveness so your rates won’t increase. Some companies give you a discount if you pay upfront for six months, others don’t, and it’s the same amount if paid in monthly payments. Have the confidence to ask questions and find what’s right for you and your wallet.
Savings & 401K: Your first job is supposed to expose you to the working world. Just because you’re accepting an entry-level job doesn’t mean it’s not important to think about savings and retirement. The sooner you start contributing to this, the better off you’ll be in the end. Use the 10 percent rule, where you try to save 10 percent of your paycheck. Savings can be essential for emergencies or extra, unexpected expenses. 401Ks are tax-deferred payments that are taken from your paycheck and put toward your retirement. Depending on the amount you put into it, your company might be willing to match the amount of money you put toward it.
Housing: I know it is exciting to think about living on your own or with friends in the city or down the street from work, but it doesn’t always make sense. If this is an option for you, consider living with your parents for three to six months to save money, have extra cash to splurge on stocking a new place with baller furniture, or have extra money to enjoy your weekends. If you cannot move home, look for other ways to save. An example would be finding a living situation near a metro or subway station as a cost-saving method in comparison to driving and parking.
When making this transition into the “real world,” remember to breathe and to ask for advice or help from your parents or a trusted family member.