Summer is right around the corner, which for many of us means graduation. This means we are finally done with high school and the restrictions that come with it. We have our whole lives ahead of us! Now this may sound like it’s going to be all fun and games, but that’s not exactly the case. With the freedoms of adulthood also come the responsibilities of adulthood.
Unfortunately, many high school graduates have little to no idea about how to prepare and do some of the things that are important to functioning properly in life. These include opening a bank account, devising and following a budget, getting a credit card, paying for college or technical school, managing one’s time, cleaning a dorm room or apartment, cooking a meal, even just changing a tire!
With this in mind, I’ve provided some tips for three very important aspects of being an independent and successful adult: managing your income, managing your credit cards, and managing your time:
- Developing a good budget plan and sticking to it are extremely important at any age, but this is particularly so when you first enter the “real world.” Many young adults end up in debt because they haven’t learned how to spend wisely or save money.
- When planning your budget, list all your expenses and your total income. Determine to not spend more than you earn.
- Not spending more than you earn will not only keep you out of debt, but it will also allow you to save money—and maybe even donate money to worthy causes.
- The following is a breakdown of what I try to do with every paycheck I receive. Each line represents a percentage taken from each paycheck.
- 50%—living expenses (rent, phone, car insurance, etc.)
- 20%—savings account/emergency fund (for that European vacation you want or for those unexpected flat tires)
- 10%—retirement savings account (it’s never too soon to start; the sooner you start this, the sooner you can retire!)
- 10%—personal spending (this is your for-fun fund)
- 10%—charity (this is not just a good thing to do; if you donate to a registered 501(c)3 foundation, you can reduce your taxes)
Managing credit cards:
- A credit card is designed to build credit. To get a student loan, a car loan, an apartment, a mortgage, and much more, companies require that an applicant has a good credit score. Having a credit card, and showing responsibility for paying off the monthly balance, will allow you to build good credit.
- Remember, this is not free money! Do not under any circumstance use this card as an opportunity to go crazy shopping or to buy expensive items, because you will be required to pay it all back. The last thing a college student needs is credit card debt.
- Most credit card companies charge 18% to 21% in interest. To avoid getting in debt, and paying more than you should for an item, always pay your credit card bill in full when you receive the bill. If you carry a balance from month to month, those jeans that were a bargain at $25 suddenly become way more expensive!
- Create a detailed weekly schedule that includes every course you are taking, lab hours (if applicable), work hours, and homework/study hours. Consider this part of your schedule as nonnegotiable.
- Then after this, you can pencil in your free/fun time: going to the gym, meeting up with friends, etc.
- Learning to prioritize activities/responsibilities is an extremely important skill to develop because as events and activities begin to pile up, not being able to balance your time efficiently can cause stress. v