Financial realities for college graduates

SMART529
Dec 12 2014

So you just received your college degree and you’re ready to take on the world. It’s a great plan, but the realities of life on your own can be less than ideal. Especially when it comes to financial obligations. To help you prepare, here is a list of common “eye-opening” potential problems and how you can avoid falling into these financial land mines.

Bills, bills, and more bills
College graduates dream of beautiful apartments with top-of-the-line audio/visual equipment and new furniture –and there is also the new stylish car that they have been fantasizing about. But what about food, gas for the car, utilities, clothes for the new job and a few extra bucks for a night out on the town?

There are alternatives. Grads can use public transportation or take on a roommate or two to help with the monthly bills.

 

Tax returns

Once you’ve joined the “real world” tax returns can be a little more complicated. The good news—as a recent grad there are several deductions you may be eligible for. You may be able to claim job-hunting expenses, such as resume services, mailing costs, travel to interviews (if you drive, keep track of mileage), professional association dues, subscriptions to journals, moving expenses related to starting a new job, charitable contributions and setting up a home office.

Understand credit before you use it

Students and recent graduates are bombarded with credit card applications, but before you apply, make sure you understand the terms of the card. Learn about the interest rates, late fees and most importantly, what can happen when you only make the minimum monthly payment on a credit card balance. After all, you don’t want to still be paying off that credit card 10-15 years down the road.

Something else students and recent grads should remember is that their credit reports will be reviewed when they are trying to rent an apartment or buy a new car. Also, job opportunities can be lost if employers check credit reports to see if they are, or were, financially responsible. Many employers will not hire a recent grad who displays the inability to show restraint and accountability in regard to credit cards and finances.

Want more financial tips? You can learn more about this subject and view other financial education resources on our website.

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