How to take control of your financial life after college.
Graduating from college is exhilarating... right?
It definitely is, until you have a moment to sit down and breathe in between the graduation ceremony, the gown fitting, and the week-long party. If your experience is anything like mine was, that's when the terror sets in. Because within the span of a few weeks' time, most ex-students face several of the scariest financial scenarios they've ever had to deal with, one right after another.
But most of us experience the same issues. Here's a rundown on the challenges I dealt with, and how I handled it - and in some cases, how I'm handling it now several years later.
First post-college-job jitters.
Once you toss that cap, the pressure is really on, like it's never been before when you were scrounging for pocket change with summer jobs. Your parents, friends, and professors all expect you to move up, on and out; even when the economy's in a downturn, it's tough to convince mom and dad that jobs are scarce.
In my case, dealing with that "first real job" pressure was really tough. I felt I had a lot to prove, and I was surprised by my early rejections. I had done so well in school! I had worked all my life! I'd had meaningful internships and study abroad experiences! Why was the interview process so daunting?
The short answer was that I was looking in the wrong places for work. Instead of continuing my fruitless search for higher-paying professional track jobs, I took a lower paying job in the non-profit industry.
As a liberal arts major, a writer and a bleeding heart, I not only got a great job with great co-workers, but I made up for the smaller salary by enjoying the non-profit world's wonderful fringe benefits. (Think $5 copay on doctor's visits, vacation time in the first year, and plenty of sick/personal days.)
Where'd my health insurance go?
If you were covered by your parent's health insurance during your college years, you probably qualified because, even though you were over 18, you attended school full time. Now that you're out, you're technically an independent. Meaning, most insurance companies are inclined to expect you to, well, pay for your own plan.
But fear not! I know this is a hot button issue in the political world, but sites like eHealthInsurance.com (which will provide iGrad readers a free quote), Esurance.com and Insureme.com actually make finding short-term coverage easier than ever. You also need to educate yourself about COBRA, and whether you qualify for it or not.
Although it can be expensive, if you're not as lucky as I was in nabbing a job with benefits straight out of school, set aside some money, do your homework, and you will have health insurance you can afford, if you do your due dilgence. I can't recommend enough the importance of researching a Plan B for health insurance as soon as you're in your last semester of school.
Grace period's over: student loan repayment plans.
If you weren't feeling the burn before, you definitely will experience the first tremors of what it's really like to be an adult once your student loan grace period ends and your repayment term begins!
For me, that was exactly six months after graduation. Even in the best of circumstances, six months isn't a very long time to figure out the rest of your life - or what you'll be able to afford to pay each month to a bank.
Although I vaguely knew I had accumulated about 15,000 dollars in debt (more money than I'd ever seen in one place), I had no idea how my monthly payments would look, having borrowed from two different lenders under very different terms.
When I finally did the math, my eyes nearly popped out of my head. I had to pay my own rent, my own car insurance, my own bills, my own health insurance and several hundred bucks a month for my loan repayments? I couldn't handle it.
But after I picked my jaw up off the floor, I made some phone calls to find out more about loan consolidation. Not only did that save me in total interest paid over the life of the loan, but it also simplified my life. And by paying on time every month with a qualified checking account (EFT), I knocked another point off of my interest rate.
Bottom line? It's not as tough as you think.
If I got through it, so can you. I didn't even have much help, other than my wits and an internet connection (which helped, a lot!).
How did you deal with the financial realities of post-college life? Did you get help from parents, personal loans, or other resources? What advice would you give students about to graduate and face the same issues?