It’s a huge transition, graduating college and being on your own. There are massive decisions ahead of you. Your friends are freaking out too, so they aren’t any help really. It can be much more appealing to veg out on Netflix, spend hours on your phone, and just ignore everything ahead you.

I know this because I’ve been there. I graduated college 15 years ago (this May) but those feelings are still so fresh in my mind. I was thrilled to be done with classes and homework and papers but terrified of making major mistakes.

The next 2-3 years after college were certainly adventurous. However I also made many money oop-sies. I am a big sister and it just so happens that my youngest sis is graduating from college this spring.

So I hope you hear the BIG SIS wisdom in this list, that you decide to find your path with cash in hand and lots of hard work.

After all, you’re a college graduate – – the future of our country.

Avoid these 11 pitfalls…please!

1. Don’t move to a city where the cost-of-living is {ridiculous}

If you must move to Los Angeles to work in your dream job with Marvel Studios, then do the math and use planning tools like a cost-of-living calculator to figure out what’s ahead and the income you’ll need.

For example, if I lived in Fort Wayne, IN ($30,000 income) and I wanted to move to San Francisco, CA, I’d need to be making at least $66,000 to make up the difference.

2. Renting a fancy apartment

Generally this category of your budget shouldn’t be more than 25-35% of your monthly income. You’re fresh out of college and you have other financial commitments, especially if you signed your name to student loans.

Find a roommate or two to share expenses. When I lived in Los Angeles, I shared a 900-square foot apartment (not fancy at all) with two other girls. 

If you are already in the habit of living within your means (no credit), then you are like 1% of the population (i.e. my husband). 

I used to feel short of breath when I heard the word “budget”. Then I finally began to realize that using a budget meant freedom and it meant that it was ME deciding where I needed my money to be. It’s much better than working so hard and wondering “hmmm, where did it all go?”

There are tons of budget tools and cool apps out there. Try some out and see which one works best for you. Then do it and follow it. That’s the only way you’ll see the magic of a budget. 

Wanna get started on your budget? Sign up below!

[convertkit form=834385]

 

4. Not saving up for the start of student loans

You may know this. You may not. You get six months after graduation before your loan repayment begins. 

The Class of 2017 graduated with more than an average of $37,000 in student loan debt.

Forty-four million Americans owe more than $1.48 trillion in student loans.

I myself graduated with only $10,000 in debt after four years at a private college which was actually fantastic. However I was not in a hurry to pay it off. But as of August 2014, I became a proud member of The “I owe nothing to Sallie Mae!” Club.

Oh wait, I didn’t just owe that $10k. Nope. I started TWO masters programs. Thank God I actually finished and use one of them. But I used loans for both of them and I also lived off the extra loan amounts (horrible choice #5,449). So really I ended up paying back almost $60k in student loan debt.

5. Spending too much on social life

What can I say? I get it. Friends are everything and we wanna do what they’re doing. It’s hard to be the weird one and say “No I can’t do that because I can’t afford it”. 

Decide what’s important to you. Is that cup of Starbucks coffee better than an extra payment on your student loan? Maybe it is to you…for now. I used to go to spend nearly $20 a week at that place but was always wondering, “Why am I broke?”. 

Hmmm, maybe it was because I got my nails done on the regular.

You can still have a social life but you do have to CHOOSE what you’ll do and know that there’s a limit. Welcome to adulting!

6. Not having accountability

Okay this is a tough one, isn’t it? Most people don’t mind complaining about their money struggles but few people are intentional about asking for help. 

Go find someone smart with their money who is a little older than you. Ask them if they’d help you get on track and use your money the best way possible. (See #7)

7. Not taking a personal finance class 

Shoulda. Coulda. Woulda. But I didn’t.

I thought I was pretty good with my money but when the big decisions came, I wasn’t ready. So here’s the thing: you don’t know what you don’t know until you know. Ya know?

SO! Go find a class in your community and learn all that you can now. This will get you around other people who are trying to use their money well. You’ll also hear stories of people who wish they’d done better in their 20’s – it’s certainly a learning experience.

My husband and I have taught these classes and whenever we see a young person who walks in and has no debt and just wants to learn – – we stand and applaud them.

Seriously. What I wouldn’t give to go back and make some different choices.

8. Using credit cards

I think you’re getting the idea. If you don’t have the cash saved up to go visit family or to buy that computer (yes I financed my first laptop through Dell), then you CANNOT AFFORD IT.

It’s extreme. I know. I get it. But I’m part of the 99% of the general population who can’t use credit and then pay it off immediately. (My hubby can – because he’s weird). The rest of us cannot.

Save up your money and do things when you have the cash. It’s simple but so very hard to actually DO.

9. Not investing or saving

Ugh, don’t those two words just make you wanna yawn from boredom?

Yep, I used to do the same thing. But now I’m 37, married for 10 years, have 4 kids. Those two words are awesome, exciting, sexy and fantastic. 

I’m proud to say that I learned from my husband. Now I can pick mutual funds to invest in with the best of them. Yep, pretty proud of myself. (That’s the feeling I want you to have – pride in what you know and do).

Ya’ll I never, ever, ever had savings. Not even a few hundred dollars tucked away just in case. And I definitely had no investments because well, that was just a foreign language to me. So I didn’t try and because I didn’t take that personal finance class, I never really understand the impact of not investing and having ZERO savings.

So save some money for those emergencies that are bound to happen. The ACTUAL emergency like a big car repair, not that last-minute trip to Florida with your friends.

Invest in your 20’s. You’ll be so glad you did.

10. Borrowing from friends and family

I’ve borrowed from friends AND family. It sucks asking and it sucks owing them anything. It taints the relationship. 

So don’t do it. That may seem like super simple advice but I feel it needs to be shared. You’re at a point in your life where you’re trying to be your own person and establish your own life. You can do it. I know you can.

If you made it through college, you can do more hard things.

11. Not working multiple jobs

So there’s this interesting fact about your full-time job: it takes only 40-50 hours of your week (unless you’re a lawyer or doctor). This leaves another 128 hours of the week to… 

You got it!!

Work another job! I worked a full-time and part-time job for almost 5 years but that was after many financial disasters. One was in an office downtown and the other was weekends at the local Applebee’s.

Most often that part-time job put an extra $300 in my pocket weekly. So an extra $1200 a month is nothing to sneeze at and I’m so glad I did it. I just wish I’d started that right out of college. 

Perks to working that second part-time job: 

• you either have extra cash or you can pay off debt faster
• you spend less money on your social life because you’re working a lot

And you still have plenty of time left in your week to be healthy, have hobbies, enjoy family, etc.

My extra perk from that part-time job? I met my husband there while serving one late Thursday night in June 2007.

So you can tell that I did not avoid the majority of the pitfalls above.

I hope you do. I’m here to help.

Post your questions in the comments below or join the community at The Debt-Free Mama on IG and Facebook.