By Emma Wenig
This is it seniors, your final weeks of college. In just a few months you’ll be walking across that stage, getting your diploma, and heading right into the adult world. You’ve been working toward this your whole life and you’re almost there. But your time for learning is far from over (sorry). It’s time to start really focusing on building your post-grad future, especially financially. You’ll start hearing words thrown around like 401K and Roth IRA, your college loan’s grace period will be expiring, and in your twenties you’ll already start getting questions about your retirement plan. It can feel overwhelming, but you can do this! Take a deep breath and let’s start with some of the basics.
Know Your Worth
It may sound simple, but really know your numbers. What is your weekly income? Monthly? Yearly? How much of that goes to savings? How much of that goes toward expenses? Do you have any debt? How much? What is the interest rate? What’s your credit score? These are questions you should be able to answer without much thought. Get intimate with your finances. The more you know about your financial situation, the more control you have over it. It allows you to plan, prioritize, and budget more effectively, which brings you to the next few steps:
Prioritize Your Money
Figure out your post-grad priorities. Do you want to pay off as much of your student loans as possible? Do you want to put away as much as possible for retirement? Do you want to start investing? Are you saving for something in the near future? Plan out your money goals for the next year, then maybe the next five years. Consider what you want your bank account to look like, and then start getting a plan together for how to get there.
Now that you know your worth and what your priorities are, figure out a budget that works for you. For an easy start, write down everything you spend money on in a month. This means all your subscriptions, groceries, entertainment, transportation, rent, etc.. You can break it down into categories if it makes it easier. Having it all laid out forces you to really look at everything you spend. This isn’t to make you feel guilty, it’s to make you more aware. I am a huge proponent of “treat yo self” and buying that coffee a few times a week isn’t going to make you broke, but maybe you see that you don’t really use that gym membership much and you’d rather utilize that money elsewhere. Or maybe you realize your takeout budget is higher than you’d like it to be and you’d like to start cooking more.
Figure out where all your money is going currently and see if that’s really what you want. There are a few classic budgeting techniques and “rule of thumb” measures for how much you should have saved by various points in your life, but the standard might not always work for you. I recommend making a spreadsheet or a bullet journal page to track your spending for the first month or so, as it gives you that interactive visual that can keep you accountable. If it works, keep it up. If it doesn’t, that’s okay, keep looking.
Life happens, and it pays to be prepared. Creating an emergency fund helps you stay prepared for whatever life throws at you whether it be unexpected unemployment, unanticipated hospital bills, or anything else. This is in a separate category from your other savings because no matter what else your priorities are you should really build up an emergency fund. To get an idea of how much you should save, think about the expenses you’d need to cover no matter what. Think about rent, food, and all other necessities covering a few months at a time. You should work towards that and then some. You may never need this, but having it will make an emergency so much easier to get through.
Money can be a major source of anxiety for anyone, but especially women. Women generally live longer than men, five to eight years longer by most studies. Our careers are more commonly interrupted by factors such as maternity leave and childcare, sometimes leaving our careers all together to enter the domestic field. Factors such as these can cause women not to earn and save as much money as men. With women graduating with degrees in larger numbers than men, and with more women entering the workforce, talking about money is more important than ever. Your work is just as valuable, and so is your paycheck. Becoming financially literate makes it easier to talk about money and how to advocate for yourself in your chosen field.
Not everyone walks the same path in life. Nothing in this guide is a cut-and-dry must, and you need to figure out what works best for you. This is more of a way to get you thinking about your finances and your future. There are hundreds of resources out in the world regarding financial literacy, and just as many money methods that people swear by. Your lifestyle will determine how you handle your finances, and whatever strategy works best for you is the strategy that really matters.