Downsize Your Living When Entering The Real World

by Broke Grad on March 6, 2012

People often say that one’s life in college exists in a bubble and is wholly dissimilar from the real world. This is certainly often the case as far as financial considerations are concerned. Most college students don’t have mortgages, insurance payments, and a family to feed. What they do have is a quality of life that encourages free spending.

If your parents are footing the college bill, you probably won’t think twice about eating every night in the expensive dining hall or paying a bit more for an off-campus apartment. If your parents aren’t helping out at all, you probably will consider a costly night of bar-hopping to be just a drop in the bucket when compared to all your student loans. Either way you likely won’t feel too compelled to reduce your expenses and live more frugally.

Graduation can change all that. Suddenly, you will realize that your spending needs to be accounted for and that your budget needs to find room for numerous real-world expenses. You’ll hopefully have a job and an income, but you probably won’t make as much as you’d like – and, don’t forget, you still need to pay off all your student loans. The transition is understandably a difficult one to make.

When money is tight and loans are high in the post-grad world, it’s important to get out of the “college bubble” mindset and learn to downsize your life so as to avoid irresponsible spending and greater debt loads in the future. Here are a few suggestions:

Live small. A benefit of being a college grad is that there are few things in your life that would require you to have a larger or more expensive living space. You don’t have substantial amounts of furniture or a family to shelter. You don’t have ties to a particular neighborhood or a mortgage on a house. With all this in mind, there’s no reason why you can’t sacrifice some space and save some money. And, if you do have a large number of possessions, you can probably get better rental rates at a self storage facility.

Minimize your spending outside the home. Graduates that can’t shed their college lifestyle have a habit of going out regularly, eating at restaurants and frequenting bars, and unsurprisingly spending a good deal of money in the process. You can avoid these expenses by thinking carefully before buying something that will not be used in your home.

Use cash. People who rack up credit card debit after graduation are often those who had a campus card or a university ID upon which they made food and book purchases as a student. The sense that you’re dealing with “fake money” while in college often persists into the real world as far as credit card use is concerned, on both conscious and unconscious levels. For this reason, going through the extra hassle of carrying cash instead of credit may be a smart decision for the first few post-college years.

Following these suggestions can help you shed the college mindset and start saving more money. While there are many ways to cut expenses, it is important that the recent graduate target those areas where unscrupulous spending was acceptable or even encouraged during his college life. The faster these areas see reduced spending, the faster you can find yourself on firmer financial footing and in greater control over your future.

This guest post is by Samantha Peters, a blogger who enjoys writing about ways for college and grad students to maximize their money by downsizing their life after graduating.

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{ 31 comments… read them below or add one }

1 David Miller March 8, 2012 at 2:59 am

yep. It’s sometimes essential to downsize our living for simplicity and making things easier. Quite a nice article. This is my first visit to this site and i’d say that the articles are quite informative. I do also manage a site similar to this listed above. Keep writing. Thanks.

2 Samantha Peters March 13, 2012 at 11:27 am

Hey David,

Thanks for the nice feedback on my post. This is a great site with lots of informative posts.

What site do you manage? I would love to check it out.

3 email server March 13, 2012 at 12:36 pm

You make a great point sometimes you do need to pare things down and keep it simple.

4 Samantha Peters March 13, 2012 at 12:37 pm

Yeah, not only is simple convenient but also a great way to save money!

5 email server March 22, 2012 at 7:09 am

So true it is so much easier when you are not bogged down by junk

6 Candace Nelson March 22, 2012 at 2:19 pm

The concept of using cash is interesting to me, but I think it’s important, too. I didn’t really give much thought to the fact that since the money isn’t tangible – not directly in your hand – it is almost like Monopoly money. I never have cash, and when I do have it, I don’t want to get rid of it. It’s just difficult when everything is directly deposited. Your card is so much easier! But you make a good point. Thanks for the advice!

7 Samantha Peters March 22, 2012 at 2:25 pm

Nice to read your comment. If all your incoming money is directly deposited than it can be bothersome to visit the Bank or ATM to withdraw what you need. However, if you are on a tight budget, withdrawing the max amount you want to spend in a week and not having your cards on you is one way to ensure you stay within your means.

Thanks for the thoughtful comment Candace.

8 John May 22, 2012 at 3:47 pm

Using cash is definitely one of the best ways to get ahead when you get out of college – or anytime for that matter! You’ll spend less with cash (because it’s limited) and you’ll feel the pinch every time you spend actual dollars. Thanks for your article!

9 John May 30, 2012 at 11:59 am

I like the idea of living small. We have a small house and it is so much easier to manage! Thanks for your post!

10 Sam Peters June 1, 2012 at 1:18 pm

Hi John,

I am glad you enjoyed my post and appreciate your comments!

Living within your means by using only the cash you carry and living in a small house or apartment really makes life easier and more manageable.

I just clicked through to the link to Christian PF, you have some really informative articles on your site. I look forward to spending some more time exploring it.

11 Rye @ Payment protection insurance June 2, 2012 at 8:00 pm

Good tips! I would also like to add getting a job in college. Use the earnings to pay some of your college expenses that way you would not be neck-deep in debt after you graduate. Also, experience is the best teacher. Working while studying is the best way to maximise your college learning experience.

12 beth July 14, 2012 at 11:33 pm

good stuff!

13 Tony @ A Young Investor July 24, 2012 at 9:13 am

Great tips! I admit, I made a huge mistake after graduation. Spent 20k on a round-the-world trip.

14 Dan - Burlington Storage August 1, 2012 at 10:16 pm

I got through college but end up broke and unsure about the next step. I did learn a LOT from the experience. The result, I grew up and learned how to be money smart. Great post!

15 Veronica @ Pelican on Money August 17, 2012 at 10:29 pm

It’s so hard to convince college students to think about repayment of student loans, even if they know they’ll be directly responsible for them later. It must have something to do with age or the atmosphere in which everything seems more forgiving.

16 Grad Student Way September 13, 2012 at 10:29 am

I agree that people need to live frugally. Then you have credit card debt, student loan debt and everything else to worry about. In fact 1 in 2 new graduates coming fresh out of school are unemployed within the first 6 months. Beyond that, some go to grad school to dodge the recession or to better their opportunities for employment once they get out. You can save all the money you want and try to live within your means, but it doesn’t really solve the problem or issue at hand. Either you land a job that pays well (hopefully within a reasonable amount of time), or you try to find other means to generate another income. This doesn’t mean that you put the frugality aside. It just means that you should have other options (especially for those living off student loans or who are in grad school). Earn money in college/grad school without taking on a second job? Def possible. Further reading: Thanks for the post, I now realize that this is a common problem that we all struggle with.

17 Ray September 14, 2012 at 11:17 am

My problem that I have found is that I grew up accustomed to a certain lifestyle (cell phone, data plan, laptop, cable internet) It is very hard to keep up with these added expenses when cshool does not allow me to hold a reasonable paying job.

18 college loans online September 17, 2012 at 11:37 am

I was able to fit everything i owned in one car and I thought that was awesome and it never made it trouble to move.

19 Hareiana September 18, 2012 at 10:24 am

The tool that saved me from financial ruin while at school was Out Of The Dark (OOTD) free online budgeting, it made it really easy to get a good handle on how much money I had to manage with and how much I could spend from it without getting into the debt prison… I still budget my life with this little free web app.

20 Kevin Mzansi September 29, 2012 at 5:56 am

About to start a “real world” job and feeling the tug of spending after a good period of being broke. Nice reminder that a little bit more restraint can really put you ahead of the game, financially, in a year or two…

21 Erin December 18, 2012 at 11:14 pm

You’re right, Sam. It’s best to ‘downsize’ your (cost of) living. Imho, don’t make drastic changes, for starters just make sure you are you’re spending wisely.

22 college loans online January 18, 2013 at 9:05 am

This is great advise I was able to cut everything down to what fit in my car.

23 ritwick March 6, 2013 at 1:10 am

nice information on downsizing your living.

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25 Ketan Gaikwad April 26, 2013 at 2:35 am

Great share. That is pretty much decent infomation on downsizing your living. I think a reality check is very necessary every now and then.

26 Sammie Curry June 6, 2013 at 9:24 am

You would likely be paying about $750 per month in student loans. The average graduate with a four-year degree earns about $43,000. At this income level, your loan payments would be your second-largest expense next to housing, and would be close to what you are spending in food and transportation combined. You would need to take drastic action to make loan payments, probably by foregoing any retirement savings and cutting back on entertainment. Even so, you might not be able to find ways to make ends meet. Someone earning around $60,000 could probably afford this payment more comfortably.

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These tips are very real. Getting your own flat, getting married, starting a family, etc., all these milestones can be really burdensome for your bank account. Thinking about them beforehand and setting up a budget asap is absoutelly necessary.

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