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Life after graduate school can be a real eye-opener, particularly when you’re also juggling the day-to-day with young kids or a full-time job. Now that you’ve received your master’s degree or Ph.D., it’s time to begin the next chapter in your life. That may include moving to a new city, landing a new job, making new investments or starting a family.
You have a lot to look forward to as a new graduate, and in order to make a smooth transition, you have to make smart decisions and take on new responsibilities. Finances should be top of mind for things to consider when you’re embarking on your new journey. Below are a few tips to help build a healthy financial future.
1. Budget what you spend on bills
Now that you’ve graduated, you have to live based on your new income. In order to manage your finances correctly, it is smart to make a monthly budget. Make sure to include everything from your mortgage or rent payment, electricity and insurance to student loans, gas and car maintenance. Make sure your bills are covered before spending frivolously on other things like extra clothes or dining out. It’s also a good idea to figure out what monthly expenses or recurring subscriptions could be adjusted in case you want to save money for future long-term savings or goals.
2. Get insurance
Make sure that you have the proper insurance in place. If you own your home, arrange regular reviews of your homeowner's insurance, as well as car, health and life insurance. If you rent, one policy that’s important to have is renters insurance. It is vital to helping ensure your household items and liability are covered in the event of a covered loss. Renters insurance can be required by your landlord, but even if it’s not, it's important to have anyway.
3. Decide whether to rent or buy a home
Now that you’ve considered your insurance needs, one next step can be deciding whether it’s best to keep renting long-term or to buy a home. Before making your decision, you should weigh out the pros and cons for both. Some pros of buying a home are receiving annual tax benefits and building equity. On the other hand, a few cons can be the higher maintenance costs or the possibility of the home’s value declining. Another suggestion to help your decision is to contact lenders to discuss mortgage options. If you’re looking to rent, some pros are fewer maintenance hassles and rent payments can be less expensive than a mortgage payment. A couple cons you may have to think about are the possibility of the rent increasing and being subject to restrictions. Ultimately, the decision boils down to you and your personal goals and priorities.
4. Make smart financial choices
Now it’s time to start considering financial choices that will be beneficial for you in the future. If you’re considering having kids, it also doesn’t hurt to start saving money for their educational expenses. You may also be considering purchases like a new car or a home. There’s a lot that goes into buying either and it’s important to know the ins and outs before making that commitment. If you’re thinking about purchasing a new car, some smart tips to consider include researching prices, checking out reviews and negotiating the car’s price.
Take the time to focus on your finances early, even while you’re still in school, to help save you from headaches in the future. That way you can look forward to your new life after graduate school and take responsible steps to make the right decisions, especially with your money.
Neither State Farm nor its agents provide tax or legal advice.