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Eight Things You Should Know Before You Graduate

Tags:  Career advice, Life after college

You've just graduated from college or are planning on doing so soon and now you're ready to change the world. In the meantime, you need to realize that there is still a lot you need to learn.


Don't Be Fooled into Believing You Know Everything


College really hasn't prepared you for everything that lies ahead, so take advantage of any opportunity to learn, now and everyday for the rest of your life. That may mean traveling abroad, volunteering in your community, joining a professional organization, or even going back to school.


Sure you may hear stories from colleagues or classmates about their cool new high-performance car or ranch-style home, but you need to investigate further to find out what is really going on with them. How did they do it? What kind of short- or long-term debt are they saddled with? Did a rich relative die and leave them a windfall?


Big decisions like becoming a homeowner or parent early in your career are not right for everyone. Making the best decisions now may save you a lot of grief and debt later down the road.


Select Your First Full-Time Job Carefully


It's your first job, there are a lot more years and job changes ahead, so how important can it be? Yes, it is true, you have plenty of time to make career adjustments; however, your first job sets the tone for what lies ahead – financially and professionally.


When people say, "it's all up from here," they could be talking about your salary. If you expect your salary to continue to grow as your career grows, then you need to start out on the right foot. That doesn't mean you should focus primarily on salary, but you do need to keep in mind that the more you earn the more you can save and the more negotiating power you will have in the future.


In addition, making the right first-job choice will help you professionally because you are more likely to enjoy what you are doing, therefore you'll stay with it longer, learn more and not look like a job hopper. Plus you won't have to explain to your next employer how you made a "wrong" career choice making you appear to have weak decision-making skills or poor judgment.


You're Not Too Young to Start Saving


That old saying, "don't put off until tomorrow, what you can do today" is very valid when it comes to saving for your future. However, too often young adults are concerned about making the financial commitment at the beginning of their career citing low wages as a hardship.


Regardless of how much you earn, if your new employer has a 401k plan, you need to be setting aside money. Even if you only contribute one or two percent, if they are matching a portion of it, it's like getting free money.


You should also have an emergency savings plan either with your bank or through some other financial institution, like ING Direct (where you will actually get a better interest rate). You might even want to consider setting up an automatic deposit plan. Whatever you choose, make sure you can access your cash should a major emergency arise.


Pay Off Your Student Loans


This may sound like a no-brainer, but you're obligated to repay your school loans and you're wise to do it, too. If you are planning any big purchases in your future – car, boat, home, business – poor credit can come back to haunt you. Not to mention the fact that the lender has the right to request repayment. And if that lender happens to be the federal government, you just might find your unpaid loans have grown exponentially as the Department of Education adds on interest and penalties.


Keep Your Debt in Check and Don't Overspend


Naturally, if you're paying off your loans, you don't want to incur more debt by filling out every credit card offer that comes your way. Learn to be frugal and forgo short-term wants for long-term dreams.


"Student" credit card offers are different than other credit card offers because the interest rate is typically higher and approval does not require a co-signer. That means responsibility for repayment is all on you. What the credit card companies are banking on is your future financial solvency and ability to pay. By providing you with credit when you most need it, they figure they have a customer for life.


Fine, you've just got to have your morning latte or that new pair of Ed Hardy's. But keep this in mind: that doesn't mean you can play and not pay. If you use credit cards, do the right thing and make at least the minimum monthly payment.


Reduce Living Expenses


One of the best places to reduce living expenses is on your rent either by sharing with a roommate or moving back home for a year or two while you save up your funds.


Now while some experts see moving back home after college as a negative (See companion article Why Moving Out of the House Might Not Be the Best Move), often times it is the wisest TEMPORARY move. And do make sure it's temporary. Set a specific move out date.


With today's economy, you should also keep in mind other ways to cut expenses. Cook at home, clip coupons, shop at discount stores, and do whatever it takes to put a little bit away from each paycheck.


Pretend You Are 50 Years Old


If you were going to retire at 62, what would you need to do now to prepare? That's only twelve years away, so you need to plan carefully. It doesn't matter if you're only in your early twenties now; you still need to plan carefully. Because before you know it, you will be 50 years old and you'll have a mortgage, a spouse, two kids in college and no hope to retire or to take a vacation anytime soon.


Planning the next thirty years of your life may seem arduous and darn right dumb; however, if you don't take advantage of opportunities, don't prepare for when you no longer work, and don't think about what lies ahead, you just might realize you should have done something and now it's too late.


Have Fun While You Can


Okay, now that you know all the responsible things you need to do, keep in mind that you still need to have fun. So while you are planning how to save for a rainy day or a condo in Cabo or whatever else tickles your fancy, you should be sure to balance responsibility with flexibility. You only live once (or so they say) so make it a good life.


What it all comes down to is that money may not buy happiness, but it does buy financial freedom. And by planning well now, retirement before 62 may very well be a reality.

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