8 easy steps for young adult college graduates

The College Graduates Guide to Financial Freedom

After all those grueling all-nighters, bad meal choices and early hours, you are finally free. Or so you thought. Welcome to the real world college grad!!!

First off, I’d like to congratulate you for making it all this way. However, you must once pick up your armor and get ready. The battle is far from over.

While you have opened more opportunities for yourself, the path you tread is filled with responsibility and a need for self-sufficiency. Of course, you are free to make mistakes but when it comes to managing your money, that’s something you wouldn’t want to do. This isn’t just about having more, it’s about being able to hold unto more while having a working budget that allows you to enjoy your time and your earnings without worry.

How can you do that? Well, check out our 8 steps for young college graduates to gain Financial Freedom.

Figure out your Expenses

It’s not about how much you earn but it’s about how much you keep after spending. For this, you need to learn how much you’ll be spending. If you don’t have any money saved up after college, you need to calculate the costs of your living expenses. This includes rent, food, bills and even debt.

This is crucial for drawing the line when it comes to your salary. As a newbie you can’t really make high demands on your pay but having a job that doesn’t pay enough could lead you into debt.

Deal with Debt

Student loans and personal loans may take a lot off of your budget. The longer the length of payment the more you end up paying. To avoid that, take care of any existing debt right away. List down all of your loans from highest to lowest interest rates. That way, you can figure out which you need to take care of first and which you can save for later.

With a little patience and lots of discipline, you will eventually free yourself of debt.

If you managed to go through college without getting into debt but you plan to. Make sure that you put it down in your monthly or bi-weekly expenses.

Start Saving

Naturally, the easiest way to gain financial freedom is to save.

Saving up at least 20% of your income is a good goal. If it seems hard to work with, then set up automatic debit features. That way, the money is automatically slipped into your savings account and all you need to do is work with the remaining balance.

To make it easier on yourself, think of what you are saving for. Buying a home, car or even setting up savings to find a new job are great goals to look to. Not only will goals keep you focused but they also keep you motivated to consistently save.

Don’t forget to focus on long-term financial goals as well. While some people may make fun of you for it, they may be doing the same. Nonetheless, it doesn’t hurt to set aside money for your retirement fund.

Cut Costs

You’re still starting out. Hanging out with friends and co-workers may be good once in a while but doing so everyday could really hurt your budget. Also, getting wasted and overworking your body could undermine your performance at work.

Try to find a good balance between your work and life out of that.

Eating out is a great way to avoid the drawbacks of a hangover or stressful night but this could cost a lot as well. You could always find alternatives to these activities. Game and movie nights are good options. Of course, you could go out and have fun once in a while. Just make sure that you’ve set aside money for this in your list of expenses.

You’d want to make sure that you have enough money left to last you until the next paycheck without touching your savings.

Shop Smart

There may be things you look forward to buying or things that you really need. Be wise with your purchases. You may think that you’ve saved up by buying cheaper shoes but if they don’t last long, you may want to reconsider your purchase and buy sturdier ones instead.

The same goes for anything else that you buy.

Although most quality items come at higher costs, over time they become a bang for your buck. That said, when you do have to buy or want to buy something think about how much ‘value’ it has. Here are some questions that you could ask to figure that out:

Do I need it? Or do I just want it?

Will I be using it a lot?

Will buying this hurt my current budget?

Can I use it often? Will it be useful in my day to day life?

How can I use this to improve my way of living? Is it beneficial for me?

If you’re not sure about your answers, you can always put off purchasing it for another time. Some make it a habit to buy something they see the next day or next week to make sure they really want it or that they really need it.

Try doing this with all your non-essential purchases. Who knows, you may even find something better tomorrow?

Stop/Cancel Unused Subscriptions

Some subscriptions may not cost a lot, but over time, they will really add up. Left unused and they’ll just become an unnecessary purchase.

Of course, it may seem fine and fancy to be part of a community or to be updated with the latest news in fashion, sports or whatever subscriptions you may be keeping but you have to ask yourself, ‘ do you really have the time for that? Will it help you earn more or is it beneficial to you in some way?’

Not all subscriptions are bad. In fact, many people sign up for things that can help them relax or unwind. You can do so long as you can make the best out of it. If not, you can always look for other alternatives. Home workouts, jogging and doing other outdoor activities are a good substitution for gym memberships. While streaming on free sites or sharing an account could be a better choice than getting one for yourself.

Get a Second Job or a Sideline

You’re young. You have the energy and you may even have the time. So, why not?

A sideline can help you add more to your income. It can also help you add a little bit more to your savings.  It doesn’t have to be big, nor do you have to spend a lot of hours. Stick to a second job that gives you time and energy for your friends, family and yourself.

Just make sure that it doesn’t burn you out. No matter how much you are able to make, jeopardizing your health is a no-go. You may end up paying hospital bills or taking a break from work altogether if you don’t have enough time to rest and relax.

That said, a great side hustle you could look to would be passive investments. Not only do these save you time and energy but these could be a great addition to your current income. You may even become an expert in passive investment schemes such as dividend stocks, peer to peer lending and rental properties. You might even earn more on these than you do with your day job.

Take Advantage of Financial Perks at work

Some jobs offer financial extras that you can enjoy as you climb the corporate ladder. If the company that you are working with has these benefits, don’t hesitate to grab them. These could be useful in upping your saving game.

You don’t need to look for jobs that have all these but it could never hurt to ask if there are any of the following offers:

• 401 (k) or retirement plan
• Health Insurance
• Life and disability insurance
• Wellness programs
• Student loan forgiveness or reimbursement
• Special Discounts

Don’t forget to ask about the policies, guidelines and timeliness of these financial perks. Each company has its own rules.

Consistency, Focus and Planning

All of these tips will be for nothing if you fail to follow through. To gain financial freedom, you need to create plans and consistently work on them. It might not seem like much from the get-go but over time you will see your efforts pull through.

In the end, Financial Independence is dependent on your ability to focus on your financial goals.