Congratulations! You graduated from college and received your degree. Now what? You now have to face reality and face the real world. First, get a job. Next, figure out what to do with your money but don't spend it all. Forty-percent of Americans live paycheck to paycheck and seventy percent of Americans live above their means. It can be tempting to buy everything you want and spend your money on everything you see but slow down and pace yourself. Here are 6 tips to help you live below your means and stay out of debt.
1. Pay with cash. Pay for purchases with cash until your credit card balances are paid in full. If you pay for an item with a credit card you end up paying 112% the original cost of the item.
2. Setup a debt payoff plan. Setup a debt payoff plan to prioritize your bills including student loans and credit card debt. Start by paying off the smallest bills first, then use the money paid towards a previous bill and apply it to the next bill and continue this process until all your debts are paid.
3. Pay more. If pay the minimum monthly payment you will end up paying 2 to 3 times what you actually charged due to the interest and finance charges that accrue on your balance. Try to send extra towards your balance each month.
4. Retirement. Start with your company's 401K as soon as you are hired for your first job. Do research to see what plan has the best options to help you achieve your retirement goals.
5. Diversify. Control your risks by investing in various mutual funds that are a combination or low, medium and high risk to limit your losses.
6. Buy insurance. Buy health, life and disability insurance. Many Americans go into debt due to medical bills and lack of insurance. Get at least basic health, life and disability coverage. Coverage is cheaper for individuals.
7. Student Loans. Start now paying back student loans. The longer you wait to pay them back the more interest accrues on your balance. Consider using student loan forgiveness programs at finaid.org.
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