Having a financial game plan is an important aspect of your life after college. Luckily, developing an understanding of the cost of living is something you can do while you’re in school. There is a cost of living calculator on The Georgia Way that was design to provide you with a better perspective of your budget – living expenses you incur compared to the income you receive. Ideally, you would like for your income to be more than your expenses. This will allow you to save money for unexpected expenses, vacations, gifts, or large purchases such as a car or house.
The cost of living expenses include: rent, groceries, insurance, utilities, and entertainment. Cost of living varies across the
country. The overall cost of living in California and New York, for example, is more expensive than living in the Midwest.
There are many changes once you leave college. If you develop a budget early, you can alleviate unnecessary stress. It’s also wise to live conservatively for the first few months after college until you get a good understanding of your necessary expenses and income.
Here are a few tips on how to save money after leaving college:
- Get roommates. Being able to divide housing expenses across multiple people will help ease financial burdens. Not only do roommates help with rent and utilities, they provide free entertainment and company.
- Find free entertainment. There are many free alternatives to paying for the movie. Go to the park. Play disk golf. Walk to explore your new city. Join a sports league. Hang out at a friend’s neighborhood pool. In a city, it should be relatively easy to find inexpensive activities to entertain yourself.
- Learn to cook (or at least make a sandwich). Kicking the habit of going out to eat can save you hundreds of dollars a year. Let’s say you grab lunch out somewhere (averaging $9) each day of the work week. That’s $180 a month and $2,160 a year! For dinners, which usually average between $12 to $20, that’s $240 to $400 a month!! Treat yourself to a meal out every so often, but learn how to cook for the rest.
- Pay your bills on time and budget accordingly. Develop a system using the cost of living calculator and companies’ automatic pay services. If you miss a payment, companies charge late payments. These can quickly add up.
- Manage debt. Many college graduates have student loan debits after leaving college. Create a plan to start paying these off as quickly as possible.
- Be realistic with your budget. You will probably go out to dinner more than you planned. You’ll go to a movie more often than you thought. Dating will start to add up. Build a realistic amount of discretionary spending into your budget; however, stay within this amount each month.
- Relax. Don’t become so miserly that you become unhappy or get so frustrated you throw your budget out the window. You should enjoy your new adventure in life, but be wise. If you splurge one weekend on entertainment, try to be conservative with your money the rest of the month. Life is about balance. Create a budget early and stick to it. This will allow you the freedom to splurge every once in a while.
- Live within your means! This is probably the most important habit to develop. One of the most difficult realizations of the transition is understanding your life will not look like your parents right out of the gate.A portion of recent college graduates have grown up with luxuries their parents provided that won’t be financially possible for some time. Ask your parents. Most of them will tell you their standard of living is higher now than when they first graduated college. Make it a future goal to aim for rather than spending money you don’t have now.
