Financial Success Habits for the Recent College Graduate

It is a strange feeling walking across that platform during college graduation and actually realizing how little you really know about the “real world.” Also two days prior to my graduation, my husband and I were married. It was a busy week to say the least. What I remember most is feeling excited and a little nervous about a new chapter of my life that was beginning with our marriage, a new career, and all the changes with finances that went along with it.

What I want to do is walk you through some mistakes we made, how we learned from them, and how we changed them around for the better. I hope you find them helpful while you have a little entertainment at my expense:

Mistake #1: Getting Into a Lot of Debt While in College and Going Into More Debt Soon After

We both did this, but I’ll pick on myself more. My parents couldn’t afford college, so to some extent student loans were needed for me to go. If I had known however, I would have borrowed as little as possible and worked my way through more. Plus there was my first credit card that I even used for buying pizza! We’re still paying 3 cents a month for that stupid pepperoni and mushroom back in 2002…but not for long.

How We Fixed It: Educating Ourselves on How to Get Out of Debt Faster

If you’ve made the same mistake as us, the best thing you can do for yourself is own up to the mistake and fix it before it gets worse. Don’t increase your lifestyle along with your income and instead take a couple of years to clean up the mess. There are great books out there and learning why you should get out of debt will motivate you to do it. Our personal favorite is Dave Ramsey’s “The Total Money Makeover.” The result of all of this is we’re going to be out of debt when I’m 25.

Mistake #2: Not Following Where Money Was Going

Our generation as a whole has been taught very little about managing money in schools and college environments. In our situation it wasn’t that we were going out and buying stupid things as much as it was just not keeping track of what was going out in expenses. If you stay really disorganized with your money long-term, you’ll always feel like you’re broke and not getting any traction.

How We Fixed It: Talking About Money and Getting on a Budget

Now I’m the type of person who somehow managed to get through college without opening up the computer spreadsheet program Excel (kind of an ironic form of torture that my current job uses it). My husband however is an organizational genius and once spent several days coming up with a budget for us. It looked great, but it didn’t last long. Now we keep things simple, and we’re more organized. It’s not about restricting yourself as much as it is realizing areas where you can be spending less so it can help you long-term.

If you’re single, try to find someone in your life that you trust and can help you stay accountable when it comes to your money. This can be a friend or a family member.

Mistake #3: Not Saving

We both came from families where money came in and immediately back out again. My entire saving childhood savings account from birth to age 18 ended up being less than $400. If you don’t make savings a priority early in life, you’ll never do it. You don’t want to wake up at 70 or 80 and have nothing. Sometimes it’s hard to think of life that far down the road, but something else I’ve noticed is time seems to get faster as you get older.

How We Fixed It #3: Learning How to Save

When you’re trying to pay off debt and get yourself out of a paycheck-to-paycheck cycle, you still need to have enough money to cover minor emergencies. Even if you have to start with $5 or $10 here and there, it’s better than nothing. It took a few times of things getting really tight before we learned how important it is to save. Not only does it help you financially but it decreases a lot of stress as well.

(Almost) Mistake #4: Buying A House You Can’t Afford

If you’re going to have no money to put down and a mortgage with more fine print than normal print, just be patient and wait. We almost did this with a house that would have been a great deal for someone because it was a residence with additional rental property, but it would have been a struggle to pull off. Fortunately, some things came up with us not liking the interest rate (higher because it was an investment property), and we didn’t go through with the deal.

How We’re Going to Fix It: Save Up a Down Payment and Get a Good Deal

If you get yourself out of consumer debt first, not only can you save up for a down payment but you can afford a much nicer house. Plus if you take your time in looking, you can come across a lot of great deals. A house is such a major purchase that patience is really important.

Mistake #5: Taking Jobs We Didn’t Like Because of Money

When you start in the working world, there are going to be career situations that challenge you to make some important decisions. I ran into several situations where I was following the money instead of following my dream. The result was I felt burnt out within 6 months.

How We Fixed It: Taking the Time to Figure Out the Career We Wanted

Today my husband and I have what I call “diversified careers” in that we each do about 6 or 7 different things to make money. We have jobs as well as side businesses and self-employment projects.

While our interests may not be the same as yours, I definitely suggest having more than one income source. This way if you get laid off or just want to have some extra money, it’s available. Really all it takes is a little less time watching TV and the willingness to put effort into something for yourself.

The Internet has opened up opportunity for nearly anyone who is willing to learn through books or talking with other business owners. We did both, and it’s worked out great. In my case, my job has gone from a requirement to optional within 3 years. After we’re out of debt, we’re going to have a lot of financial freedom and the time to enjoy it. We’re normal people who just wanted to do something different with our lives than most people do. My point is if we can do it, anyone can.

I hope you’ve found these ideas helpful, and I wish you the very best!