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.