RelayRides blogger Amanda L. Grossman shares tips for how to stay financially afloat during your first job.
You’ve scored your first job out of college. Bravo, you!
Getting a job right out of college, and specifically in this economy, is something to celebrate. And while your first paycheck might feel like a huge amount of money compared to what you’ve been used to bringing in (for me, it was minimum wage on a federal work study job at the library counter for four years), it might not take you as far as you’d think.
There’s taxes, the big chunk you pay to keep a roof over your head, transportation costs, food costs (and let’s face it, these prices have risen quite a bit since when you started college), various insurance policies, student loan debt, perhaps some credit card debt leftover from making so little these last four years…oh yeah, and entertainment costs (after all, what exactly do you work for?).
I’d like to give you three pieces of advice on how to stay financially afloat during your first job because I’ve been there, and I came out the other side alive (with retirement savings intact).
Continue Living Like a College Student
When I graduated college, I lined up a roommate straightaway. The same 10+ year old vehicle that I had driven to college is the one I used to get back and forth to work, and I resisted the urge to revamp my wardrobe. In fact, I brought all of my dorm belongings with me and made them work in my new apartment. And guess what? The benefit to this was that I was able to not only pay all of my bills on a first-job-after-college salary, but I was actually able to start saving for retirement.
Resist the urge to inflate your living expenses and upgrade your life dramatically. Instead, live more like you were living in college and bank the extra cash (or send it into those student loans to get out of debt earlier). Trust me, you will thank yourself later.
Turn Idle Assets into Worker Bees
You probably don’t have many assets, but did you know that some of them can still be working to boost your income for you? For example, rent out your vehicle during times when it’s idle on a peer to peer rental site like RelayRides. People average an extra $250 per month…and some have made thousands! Rent out your spare bedroom, or space in your garage for someone wishing to store things. If you’re not wanting a full-time roommate but have a spare bedroom, think about renting it out from time to time on a site like AirBnB.
Volunteer for Something that Means a Lot to You
Now that you don’t have studies and a blooming social life keeping you busy, you might be tempted to spend those paychecks to stay entertained. Volunteering for a cause that is near and dear to your heart not only helps others in need, but it can also provide a social outlet for you. You’ll find it’s much harder to meet people your own age once you are off campus, so volunteering can become a free way to stay entertained and meet people outside of your job. Who knows where this will take you?
Enjoy your first job, soak in the experience, keep your resume updated every six months, and begin to get a feel for what you want to do for the rest of your life. Above all else, please live within your means, as this will open up more possibilities and opportunities for you in the future that you can take advantage of.