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Budget Tip For Graduates: Look Ahead When Managing Debt

Budget help for graduates

Young graduates are not looking to get stuck with bed debt problems. Unfortunate, many are. Coming out of college in their early 20’s, graduates face tens of thousands of dollars’ worth of student loan debt without the promise of a high paying job. How many of these same graduates fell into credit card debt as well? According to a CNN survey, the average student leaves college with $35,500 in government, family and personal private loans. It also includes about $3000 of credit card debt. That’s a tough starting position to be in.┬áThe faster the young adult learns to budget a paycheck and focus on paying down debt, the less likely they will be in jeopardy of needing alternative short-term loans.

One of the first things a young graduate must do is figure out exactly how much money they owe and to whom. Total the amount of monthly payments. Include student loans since the six month grace period will be over quickly. A budget plan must encompass all of this debt along with cost of living expenses.

Once your total monthly expense sheet is complete, you can focus on what kind of lifestyle you want to live while looking for a job. You may not be able to get everything you want right now, so don’t hurry into more debt. The last thing you want is to be 25 with student loans, no more credit and using payday loans to make ends meet.

As helpful as fast cash loans are during an emergency, using them to pay for a lifestyle is never a suggested management system.

Live within your budget and plan to pay off debt.

Many graduates move back home during the transition in order to limit payment expectations. That dream apartment or condo can wait until you have a job and have taken care of some of the debt. It’s important to remember that life is just starting and you have time to get all the luxuries you desire if you play your cards right. In this case, your cards come in the form of cash. Your dream car can wait, for now stick to something with minimal or no payment at all.

After you find employment, don’t hurry out to upgrade you lifestyle just yet. You still want to work off some of that debt before you take on more financial responsibilities. Graduates also want to begin thinking about retirement accounts. At least start a savings account to help with emergency or unexpected costs. It’s the best way to protect you from getting back in debt with credit cards or worse yet, payday lenders. Young adults have hopes and dreams, but they don’t have to happen all at one. Hold off on the new car or mortgage until your income can support everything that comes with it.

In all of your debt troubles, don’t forget to save. The more you can put away now, the more money it will make for you when it is time to retire. Just because you are looking for your first job in your chosen career, it doesn’t mean you don’t have to think about retirement.

About Holly Petherbridge

I am a Blogger, Web Content Writer, Teacher, Mom. A woman of many hats. As an elementary teacher, I had always encouraged my students to write more. I find myself falling back on my own teaching techniques to share what I know about building and rebuilding personal finances.
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