5 Things I Wish I Knew Before I Graduated From College
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I’m ashamed to say it but it has been nearly 15 years since I graduated from college. I’m even more ashamed to stay that when I graduated, I knew more about my alma mater’s football team than I did how to land a good job, get ahead and start investing financially for my future. Nonetheless, spring, graduation and regret-free new beginnings are in the air this time of year.
The National Association of Colleges and Employers estimates that nearly 1.8 million students will graduate from college. That’s a lot of new bodies in the work force. Watching my younger brother walk across the stage last weekend to receive his diploma in technology education reminded me how I felt 15 years ago when I set out to find a job with nothing but an expensive piece of paper (and load of student loan debt) in my pocket. As I look back, there are many things I know now that I wish I knew back then. I thought I’d share a few of them with you in case you find yourself, or someone you love, fresh out of college.
Hard Work Trumps Your Piece of Paper
Unless you earned your degree from Harvard or Yale, then the piece of paper you got mailed to you months after you walked the stage is meaningless. What helps you stand out, to a certain extent, in the “real world” is hard work. Sure, it’s also who you know but hard work will help set you apart like very few things will. If you’re lucky enough to get a good job right out of college, work to impress. If there are new projects coming down the pike then find one you like and volunteer for it. Look for ways to grow yourself professionally and expand your capabilities. I can’t think of a better way to make a name for yourself than this.
Networking, Networking and More Networking
This really is something I overlooked greatly when I graduated from college. To be fair, I had not picked the best of majors and job prospects were slim. That said, it’s not what you know but who you know. I have seen this borne out in my own career and those of friends and family members. You can beat your fist against an iron ceiling trying to get into a certain company, department or position; often, how qualified or talented you are means little if you don’t know someone who can help you get your foot in the door.
At the end of the day, despite what anyone says, business is personal and getting in or moving up comes down to relationships. Look for ways to meet new people, especially if you’ve moved to a new city as the result of landing a job. One of the best ways to do this is to find out if your college has an alumni group in that area. If they do, try going to some of their events and don’t be shy. You already have something in common with many of the people there – you went to the same college! These connections can prove to be invaluable as you never know who that person knows. Just remember that networking is a two way street and is not all take and no give. When you see an opportunity to help someone with your influence, take it!
Allow some Lifestyle Inflation…Within Reason
I know that lifestyle inflation may be a taboo topic, and I am not saying to go crazy on the spending. But, what I am saying, is allow yourself some fun money. Whether it’s a set aside amount of money to go out with friends every once in a while or money to buy something you want for your new home, buy it! Just make sure you do it within reason – don’t go buy a brand new sports car and then complain because you can’t afford the car insurance (or if you already did this, maybe find the best car insurance company to lower your rates).
Please, please avoid my mistake of going crazy with lifestyle inflation and racking up debt on your credit cards with no second thought. The key is to set aside an amount each month for “fun” or “entertainment” and live within that. This assumes of course that you’re already budgeting and living below your means each month. Using a credit card isn’t bad, per se, just make sure you know where the money you’re spending that card is coming from.
Start Paying off the Student Loans Right Away…if You Can
I’ve read numbers that claim that the student loan debt bubble is at or near $1 trillion here in the States alone. That said, I am sure that those who have graduated from college with little to no student loan debt are in the minority. I know that with many federal student loans they give you a six to nine month window before you have to repay them, but am not certain how it works with many private loans. Once that period ends, you should start repaying them, if at all possible.
Many student loans will allow for you to get hardships or deferrals and should be used if you absolutely need to. I learned that lesson the hard way; deferring my student loans only made it take longer to get them paid off. In the long run, the deferrals simply weren’t worth it. All deferrals do is tack more interest onto the loan and further delay paying off your student loan debt. I am happy to have finally paid off my student loans last year but am saddened that it took me nearly 15 years to accomplish the task.
Invest in the Stock Market as Soon as You Can
I know for many that have just graduated from college that investing in the stock market is often not even on their minds. It was not for me at least. I wish I could go back to my younger self and smack him silly. If you can afford it, saving for retirement is likely one of the wisest decisions you can make once you’ve gotten that job and entered the real world. Do a little bit of research and determine what might be the best online brokerage for you and open a Roth IRA.
Time is so often overlooked when it comes to investing that you can really put yourself ahead of your peers when it comes to this. Another thing to do is take advantage of your 401k match, assuming your company offers one. That’s free money, which is the best to receive. If the 401k plan is not very good then invest enough to get the match and put whatever else you can afford in your Roth IRA. If opened once you start your first job out of college, then you get to take advantage of the wonderful aspect of growth. If you start now, you may amass a nice sized portfolio by the time you are ready to retire.
What is something you wish you would have known when you graduated from college? Would you smack your younger self silly?
Photo courtesy of: Pbinder
John is the founder of Frugal Rules, a dad, husband and veteran of the financial services industry whose writing has been featured in Forbes, CNBC, Yahoo Finance and more.
Passionate about helping people learn from his mistakes, John shares financial tools and tips to help you enjoy the freedom that comes from living frugally. One of his favorite tools is Personal Capital , which he used to plan for retirement and keep track of his finances in less than 15 minutes each month.
Another one of John's passions is helping people save $80 per month by axing their expensive cable subscriptions and replacing them with more affordable ones, like Hulu with Live TV.
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