Graduating from college is both an exciting and terrifying moment in every young adult’s life. On the one hand, there is the sense of accomplishment. You just EARNED your four year degree. You spent countless hours studying, sitting in classes, taking exams, and finally walking across that stage to get your diploma. Talk about hard work realized. Yet, at the same point, the life that you have known for the past four years is instantaneously gone. No more late night runs with friends to the local fast food place. Adulthood is here to stay. Not only are you forced to say goodbye to many close friends, you are also met with many financial challenges as a college graduate. How you respond to these challenges will often determine your success for years to come. Here are four popular financial challenges that most college graduates must face.
Finding a Place to Live
If you don’t plan to live with your parents after graduation (side note: who ever plans on doing this?), then you are often faced with decided where you will live. This decision is often made easier when you have a job or spouse already. For those who have neither, the options are limitless. Some college graduates stay in their college town, working where ever they can, in order to continue the college life. Others return to their home town because that is what is familiar. While these decisions are understandable, why not try something new. You could live overseas for a year or two to gain some new experiences or you could move to a new city.
Finding a job without sufficient experience may be a challenge. As I have covered before, it’s not impossible. While the job market is a challenge these days, it’s only the beginning. In fact, getting a job is often the starting point of becoming responsible with your finances. USA Today writes about the transition from your first job to your first budget. It’s a natural transition. Once you start making more than enough money, you are faced with the question of what to do with it. Do you spend it all away on a new car that you don’t need? Or do you start saving for retirement? These types of challenges will change the rest of your life. It will either set you up for success or create spending habits that will be hard to break.
Saving for Retirement
Young adults saving for retirement is often seen as a oxymoron. I tend to believe that this is changing as a result of the financial challenges that people have faced over the past 5 years. Everyone should understand that no sense of financial stability is secure. Many young adults are starting to realize that they need to save for retirement early. But, saving a lot early is only half the battle. The next challenge that college graduates face is figuring where to invest their money and how to best prepare for retirement. These are big questions and very rarely is there an easy answer. It often takes years, if not decades, to find your approach.
Consider Life Insurance
The last major challenge that young adults face is the question of life insurance. This is a challenge that I faced last year when I decided to get whole life insurance. Too many of my friends have ignored this aspect and I fear to think what is going to happen to their spouse if they don’t have adequate insurance. I can sympathize with them and why they don’t make it a priority. They have very little extra money to spend and have a difficult time saving money in the first place. How are they going to afford an extra payment? Yet, at the same time, I know the cost of not having life insurance. While it may not seem as pressing as the other challenges listed above, life insurance should be considered at the very least.
While graduating from college may present you with many financial challenges all at once, you can overcome them. Be purposeful in conquering each and every one. If you do this, you will set yourself up for prolonged success.
What challenges did you face after graduating from college?
For my readers who didn’t attend college, did you face these challenges earlier? How do you think it was different for you?