Keeping track of cash is hard in college, let alone after graduation. If you get an entry-level job after college and barely earn peanuts, it would take you approximately a thousand years to pay the average college loan—that is, if you spent no money on food, a place to live, getting to work, anything health, anything family, anything at all. But it turns out there are quite a few ways to manage money that will help you get the most of what you have (or even make).
1. Build Your Credit
Get a credit card (and pay the bills). “Start building credit history, which may require getting a credit card under your name and being very good about paying it on time,” said Senior Economist and Policy Advisor at the Boston Federal Reserve Bank Maria Luengo-Prado. “Credit scores are important not only to obtain loans in the future, but to rent apartments and to get certain jobs.” A good credit score is what you need to invest in future purchases you can’t just casually pay for, like your dream house or your children’s education.
2. Pay Back Dem Loans
When possible, pay back loans with high interest rates sooner rather than later. If money happened to fall from the sky and you want to put some of it aside for some new clothes or a fancy car while only paying the minimum for monthly repayments, don’t. Pay back more of the loan.
3. Find Employers that Aren’t Loan Sharks
If you find the previous tip difficult, keep in mind there are jobs that will send money straight to pay the loans to help you with this. These range from an engineer for airplanes, to a nurse practitioner for veterans, and way more. “You may want to consider working for employers that will help you pay those loans after graduation (e.g., the federal government). Also, it is very important to understand the repayment terms of your loans,” Luengo-Prado. So basically you can get a job as a spy and still pay off your college loans along the way…or something like that.
4. Learn the ins and outs of money
It may help you to learn a little more about your money outside of this article and in the classroom. “If you don’t know already, learn about the concept of compound interest. Once you learn that, you will understand why it is so important to pay your credit card debt or your student loans on time,” said Luengo-Prado. If you think you can handle it, taking an economics class may help you with credit in more ways than one (Get it? Class credit and financial credit?).
5. Budget, Budget, Budget
Keep a budget. Managing money can be surprisingly difficult, especially if you suddenly start making that phat bank. Keeping track of expenses versus income can be your saving grace. “Learn how to make a budget to make sure you can live independently,” said Luengo-Prado. Maybe that way you can afford (so punny!) to have a little extra eventually and spend it on something nice, rather than driving yourself into a debt.
6. Save Money to Make Money
Yeah, saving money can actually help you make money. Crazy, right? “Start saving as soon as you can. You’ll never regret it. If you don’t need the money in the near future (within the next 3-5 years), think about putting money into a low cost stock index fund,” said Boston University finance professor Allen Michel. Consider investing in a Roth IRA. A Roth IRA basically means you can’t take the money out until you reach a certain age but, like a piggy bank, the small amount you put away can add up. This sounds like a ridiculous thing to do with money at our stage when we have so little of it. However, putting even a small amount in it will magically grow into more over enough time. “It is never too early to start saving for retirement,” said Luengo-Prado.
7. It’s Never Too Early for Retirement
“If an employer has a retirement plan, put as much money as possible (the maximum allowable) into the plan,” said Michel. “The benefits are staggering as your nest egg will grow exponentially through the power of compounding.” Money growing exponentially? That sounds miraculous. “Many times employers will match your contributions,” said Luengo-Prado. So if you put in a certain amount, the company will add the same amount. It will be raining money. Sort of. Metaphorically.
Shopping does fall into this discussion, of course. If there are things you can buy in bulk that won’t go bad, like paper towels or foods like Ramen, buy them in crazy amounts. You’ll get more for less, just like that. The struggle with those, of course, is getting big sacks and boxes of things home if you’re walking, biking or taking public transport. So take advantage of this opportunity when you have access to a car.
9. Spend Less
Also keep in mind some of the ways you can just spend less on what you buy less. For example, try bringing your own lunch or dinner to work instead of relying on that meal plan 24/7. Before buying an extremely expensive version of your textbooks or that cute top you want, make sure you’ve checked some other versions and shopped around, even though it takes a little extra time and involves a different brand name.
10. Don’t Borrow More than You Have To
“Learn to live with minimum borrowing. It’s a lifestyle choice, but if you get used to borrowing in this low interest environment, you’ll find it hard to wean yourself off debt as rates rise. Debt can easily become addictive. It’s the opium of the financial world,” said Michel. Yeah, let’s avoid financial opium. It’s not always easy to follow these tips, but they’re good #lifegoals, amirite?