You Did It! Now Get a Job

Following 16 years of formal education, the last four of which were likely particularly grueling, the sense of accomplishment which accompanies college graduation is simply unparalleled. However, after a few weeks on Cloud Nine, reality quickly sets in when you have to find a job, locate an affordable place to live, and realize just how much (or little) of your salary you actually take home each month. It’s not an easy task, and it will likely involve some sacrifice, but for those who plan to enter the workforce immediately after college, these tips will help ensure that you establish smart money habits which will benefit you for years to come.

1. Know your next move. While many students spend their last semester of college on the hunt for the perfect job, it’s quite possible to turn that tassel without a sense of what’s next. The first piece of advice we give to grads is to network. Go to alumni-sponsored events, use social media platforms such as LinkedIn, and ask your friends’ parents and parents’ friends for advice and help. You’d be surprised what social connections can do. Also, don’t underestimate soft skills; saying please and thank you, handwritten thank you notes, and basic manners go a long way in the interview process. Finally, understand that your first job may not be your dream job, but it can be a great stepping stone to that dream job or career. You may even surprise yourself and find a passion of which you weren’t previously aware.
2. Understand your paycheck. One of the most exciting things about your first “real” job is that real paycheck, but don’t simply take your starting salary and divide it by pay periods or you’ll be woefully disappointed. Federal, state, and local taxes, and Medicare payments will be deducted before you see so much as a penny. There should also be 401(k) deductions (remember to always pay yourself first!). Some companies may deduct expenses, such as parking, from your paycheck on a pre-tax basis. Finally, you may see health insurance or flexible spending account (FSA) deductions. What’s left in your direct deposit is called net pay. It’s also important to understand pay periods. For example, if your first day of work is July 2 and your employer doesn’t process payroll until the end of the month, you will have to work for an entire month before getting paid.
3. Become financially literate. In a 2015 study by the American Institute of CPAs (AICPA), 57% of college students rated themselves as having excellent or good personal finance skills, compared to 12% who rated their skills as poor or terrible. Despite those promising figures, only 39% of college students reported having a monthly budget, and almost half (48%) reported that their bank account had fallen below $100 during the previous year. If any of these stats sound familiar, your personal finance skills might need some brushing up. Do yourself a favor and learn as much as possible about personal finance before developing bad money habits. It’s easier than ever to become financially literate, thanks to an abundance of free online resources and smartphone apps from reputable sources.
4. Live within your means. Have you ever been scrolling through your Instagram feed and seen a friend’s new designer handbag or limited-edition shoes…and then immediately decided that you needed them, too? You’re not alone. What’s more, apps such as LIKEtoKNOW.it make purchasing items as easy as a few clicks—before rationality has time to kick in. This “Keeping up with the Joneses” mentality will eventually drain both your mood and your bank account if you act on those impulses. Instead, establish—and stick to—a budget. Additionally, actively look for ways to save money. One of the biggest costs for graduates is housing. The median monthly rent for a one-bedroom apartment in Atlanta is $1,330. Consider taking a roommate or two or even bunking with mom and dad—at least until you can save up a bit.
5. Establish good credit. If you don’t already have a credit card now is the time to get one, but only if you trust yourself to use it responsibly. It takes both time and patience to build up good credit, which will be helpful down the line when it comes time to apply for a car loan or home mortgage. Pay in full and on time every month. However, if you’re afraid of tempting fate with a credit card at your disposal, other options do exist for building good credit, such as repaying your student loans on time or having utility bills in your name. You may also want to look into reporting rental payment history—assuming it’s positive—to credit bureaus, as a number of options now exist. Finally, don’t forget to request free copies of your credit report once a year from each of the three nationwide credit reporting companies.
6. Create a plan to pay off student debt. Although most loans have a six-month grace period, it’s never too early to begin planning for, and even paying off, your loans. Just because no payment is due doesn’t mean that you shouldn’t make payments, especially since the sooner you pay off your loans, the less interest you will pay. Also check to see if your loans will accrue interest during the grace period, as that interest will capitalize (be added to the principal) when the grace period ends. Depending on where you graduated from college, and if you have a good, stable career, you may also be able to refinance your student loan for extra savings—which translate to tens of thousands of dollars over the course of the loan.

While budgeting and repaying loans may not be fun, they are essential to your financial wellbeing, both now and in the future. Once you have a handle on the above, check out our recent post, “Financial Planning by Decade: Your 20s,” in which we share important information about saving for retirement, building an emergency fund, and setting long-term financial goals. Additionally, as you look ahead to the future, remember that personal financial success is a journey, not a destination. The sooner you get accustomed to saving for big purchases and meeting all loan repayment responsibilities, the easier and more rewarding that journey will become.

As a wealth management firm, Balentine is committed to providing peace of mind and simplicity to clients in all stages of life. Please talk to a Balentine Relationship Manager if you have additional questions about financial planning.