10 Debt Management Tips for New College Grads

After earning a college degree, it's time to face reality. Here's how to tackle your debts responsibly while navigating a new career and enjoying newfound freedom.

10 Debt Management Tips for New College Grads Photo by Robert Kneschke / Shutterstock.com

Congratulations, college graduates! You’ve just completed an important milestone in your life.

Now it’s time to face reality. If you had financial help along the way, it won’t be long before those you owe come knocking.

The student loan debt won’t pay itself. So, you’ll need to quickly figure out how to take care of monthly obligations once the repayment period starts.

Here are a few helpful tips to consider when managing your debt:

1. Do the math

Know what you owe, or it will be impossible to develop a practical debt reduction plan. Free online tools like FinAid’s Student Loan Checklist can help.

2. Come up with a plan of action

Once you have determined how much you owe, create a realistic spending plan that allows you to take care of monthly obligations, including student loan and credit card debt. That way, you will have a plan for every dollar before it even hits your bank account.

When listing projected expenses, remember that living in the real world is a lot more expensive than college life. It may be a little tough to adjust, especially considering all the new bills. But hang in there.

3. Save

If you are starting off with a decent salary, be careful not to exhaust all of your income each month. Instead, save for a rainy day and allocate any additional disposable income to outstanding debt balances.

If you graduated debt-free, save as much as you can. You never know when a little cash can help you get through hard times or allow you to explore new opportunities.

For example, it is possible you might enter the workforce and decide a particular career path isn’t for you. With a little cash to fall back on, you can afford to take some time off to explore other options, relocate or even start a business.

4. Move in with your parents

You may cringe at the thought of leaving your newfound life of freedom and moving back home. But such a move may not be a bad idea if your parents are willing to welcome you with open arms.

Not only will you have more time to prepare for the real world, but you’ll also be able to save a little cash. Be sure to ask if they would like you to contribute to household expenses, however.

5. Don’t be tempted by new offers

After graduation, don’t automatically aim for a more luxurious life. Avoid the new-car payment and the many credit card offers that come in the mail.

Even if you land a sweet gig, you might find you’re a horrible money manager and need to fall back on savings. Or, you might simply realize that you can’t really afford a ritzy lifestyle after all.

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