Make a Post-College Budget

Broke college student meets real world: how to budget

For those of you who didn’t have much help from your parents financially during school, you’re probably used to making, and sticking to, a budget. For those who are just now being cut off, welcome to the real world. Either way, the “real world” presents a variety of new expenses and challenges. These tips will help you stay on top of everything that adult life may throw your way.

1. Rent

If you thought you were paying a lot for student housing, I hate to be the one to break it to you, but you’re about to dish out the same, if not more, on your next place. To save on housing, find some roommates! Living alone on a tight budget is possible too, but you may have to make some compromises. For instance, you may have to look a little outside the city you work in for more affordable options.

Wherever you end up, you will be expected to pay your deposit (usually equivalent to monthly rent payment) and your first month’s rent upon signing. Depending on your credit score, you may be asked to pay an additional liability fee. If you have the ability to have someone cosign, this can help cut those initial costs.

2. Furniture

Now that you’ve found the perfect, affordable place, you’ll need some furniture! You probably have a few random pieces from your old room, but if you are coming from a fully-furnished dorm or apartment, you may be starting from scratch. Don’t panic! There are lots of low-cost options and sales to stock your space.

Buy your furniture during Labor Day or Memorial Day weekend. There are SO many sales going on and you’ll end up paying a fraction of what you normally would. Also look to buy in between seasons, stores usually have massive clear-out sales when they are changing inventory!

HomeGoods, Target, World Market, IKEA, and Wayfair have great products for great prices. The key to furnishing a new place is to buy a few things at a time. You likely won’t have the disposable income to finish every room right away. Start with the essentials (mattress, bed, couch, table and chairs) and slowly add more pieces as your paychecks come in.

3. Moving

Moving to a new place is also an added cost. You may have to rent a moving truck or pay a moving company to help pack up and relocate your things. To save money, try to find boxes for free from the liquor store or use space bags to shrink down your large sweaters or bedding.

If you know friends with pickup trucks, ask if they’ll help move your large items so you don’t have to spend the extra cash on a Uhaul!

Depending on how far the move is, your company may help pay for relocation. This is something to consider during the negotiation phase of your job offer.

4. Cable/Internet

I’m sure you enjoyed having cable and internet included in your rent in college. Unfortunately, you will be responsible for these payments in your new place. In today’s age, internet at home is an absolute necessity. However, you may consider skipping out on the cable package and sticking with Netflix or Hulu for a while.

Cable can be incredibly expensive. If you know you only watch a few channels, try looking for a more flexible option. Sling, DirecTV Now, PlayStation Vue, and others offer fewer channels and different package options. These are much cheaper than traditional cable, a great option for someone on a budget!

5. Utilities

Utility payments will vary depending on where you live. Most likely you will be responsible for a lot of the things included in your rent in student housing. Water, power, and trash are now additional costs beyond your rent.

Your water and power bills will reflect the amount of each that you use. Trash may or may not be an additional fee at your new place. If your apartment complex offers valet trash, it’s usually anywhere between $10-$25 a month for them to pick up the trash outside your door every night. This is not an optional service. These will all be indicated in your lease and are non-negotiable.

6. Pet expenses

If you had a pet in college, your expenses will be about the same. Different apartment complexes (or houses you’re renting) charge different pet fees. There may be a one-time deposit or you may have to pay monthly pet rent (per animal) to keep your furry friend with you. Do your research before moving into a new apartment because some locations are more lenient than others.

Consider utilizing 1-800 Pet Meds to save on your pets’ prescriptions. PetSmart and PetCo can deliver your pets’ food to your door and will discount if you set up auto-purchase! If you love to spoil your pet and were previously purchasing monthly subscription boxes with toys and treats, you may want to consider taking a break from this unnecessary expense until your new place is furnished, your student loans are paid, and you know you can afford your rent and utilities.

7. Car payment

Chances are you’re probably hanging on to the car you had all through college and there’s nothing wrong with that! You may already have that car paid off and now you can just focus on your insurance payments and keeping up with your registration tags every year.

If you are looking for a vehicle, new or use, there are a few things to consider. Think about what down payment and monthly payments you will have to make. Ask your insurance company if your rates will go up if you get a new car. Look at Car Max or consider shopping at a dealership during the holidays to find the best savings.

If you are moving to a new city and starting a job that doesn’t require a car, look into selling your car. You can put that money towards transportation costs (for instance if you will take the bus or subway to work) or other new expenses.

8. Insurance

If you’re renting an apartment or a house, you’ll need renters insurance. It’s required and you’ll need to show proof that you have it before signing a lease. Shop around a bit before you pick a policy to help save money. Some companies will give you a discount if you pay for the whole year upfront rather than making monthly payments. It may not be exciting, but you’ll be glad you have the insurance if anything ever goes wrong.

Car insurance is another necessary expense. This may feel burdensome, but if you are ever in an accident you will be very glad you have it. Again, shop around a bit to find the best rate. Some insurance companies have deals with Alumni groups and you can get a special discount. You may even be able to continue your discounted insurance or receive a lower payment if you graduated with certain honors!

9. Credit card bills

Credit cards are a really helpful way to build up your credit if you don’t have any or if you took a hit in college. As long as you’re keeping up with your monthly payments, you should be okay! If you don’t have a credit card or don’t want one right away, that’s okay, but don’t wait too long because the sooner you start building your credit, the better. You’ll need a strong credit score to buy a house one day, get a new car, or even to rent an apartment or house.

Don’t stress, we have tons of tips and tricks when it comes to credit cards. Check out our helpful advice here.

10. Student loans

Student loans may be the most daunting of all of your post-grad expenses. Other than rent, your loan payments will likely be your biggest expense. You have lots of options when it comes to paying off your student debt, so do your research and know all of your options!

If you need to hold off on buying furniture one month or eat in instead of getting takeout, it won’t be the end of the world! The key is to be sure you’re keeping up with your monthly payments. Missing a payment will hurt your credit and you don’t want that!

11. Business attire

Now that you’re in the working world, you’ll need more than just one business casual outfit. Chances are your company will have a dress code that doesn’t include your favorite pair of ripped jeans or your coziest hoodie from school. Unfortunately, your days of rolling out of bed and going about your day are over.

TJMaxx, Steinmart, and Express have everything you could possibly need to start your working wardrobe at an affordable price. You’ll need several pairs of work pants, tops, ladies will need dresses and skirts, guys will need ties and button downs, and everyone needs a nice blazer.

Keep in mind that you don’t need to get everything at once. Your professional closet will grow over time! You can always ask your family for gift cards on birthdays and holidays to help build your wardrobe.

12. Food/Groceries

If you were lucky enough to have a meal plan in college, you’ve had the luxury of eating pretty much whatever you wanted for the last few years. Now that you’re out of school and on your own, you’ll need to start budgeting for groceries.

Eating out gets expensive, fast. If you’re inexperienced with cooking, that’s okay! You don’t have to be Gordon Ramsay to be able to survive. There are tons of easy meals to get you by. After you’ve stocked up on the essentials, there’s no reason to need to spend more than $100 on groceries a month. You may spend more or less in given months depending on what you keep in stock or run out of faster.

A helpful tip when it comes to buying groceries: don’t over buy. You’ll end up sad and frustrated as you throw away moldy and expired food that went to waste. Meal planning can help you buy only what you need every few weeks to make meals and waste less.

13. Taxes

Ah, the dreaded taxes. Tax season falls between January 1-April 15. Adulting basically means getting taxed for everything you do (at least it feels like it). Now that you’re out of school and your parents no longer claim you as a dependent, you will find yourself paying on a few more things.

Keep track of anything that may qualify as a deductible, like using public transit or donating to a charity. Even out-of-pocket costs like commuting for a job interview can be written off as a deduction.

If you can manage the extra expense, you can always hire someone to handle your taxes for you. However, this can get pricey, and services like TurboTax or H&R Block can make it a little easier (and cheaper). Always do your research. Taxes are tricky for everyone, so use all of your available resources to make sure you will get the most return on your taxes!

14. Entertainment

Just because you’ve entered the adult-world doesn’t mean the fun has to stop! There’s bar crawls, beer fests, new restaurants to try, or maybe you’ll finally take that vacation you’ve always wanted with all of your saved PTO!

As long as you’re able to make your necessary payments like rent, student loan payments, and insurance bills, there’s no reason you can’t set a little money aside for the fun stuff. Maybe you eat pasta for a few nights one week so you can save up for a fun night out. With larger expenses like a vacation, you may want to set a few dollars aside each week or take a little out of each month’s paycheck to afford a fun trip.

It’s all about that work-life balance in the real world! Don’t forget to treat yo’ self.

15. Rainy day fund

This expense doesn’t feel necessary until something happens and you don’t have it. While most people may never need it, its good to set aside a bit of money in case of emergencies, such as a serious illness or injury or your car breaking down.

Depending on your company’s benefits plan, you may be eligible for short or long-term disability if you can’t work. While this is helpful, you don’t want to rely on that coverage. Be prepared! Set aside some money each month for a rainy day fund. Hopefully you won’t ever have to use it, but it’s always a good idea to have it just in case.

If you happen to be in-between jobs or moving towns, your rainy day fund would be a great source to make your credit card or student loan payments.

Whatever money is left untouched can be saved for retirement, a future college fund, or even to help pay off your student debt for future months. It may be helpful to make a spreadsheet to keep track of your expenses and see where your money is going every month. Some mobile banking apps will even do this for you.

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