With lots of lots of new college graduates now getting ready to enter the “real world”, aka the working world that we’ve all come to dread love, including my little brother, I’ve been thinking a lot about the financial mistakes I made as a new college graduate. There were plenty!
While I was pretty smart about getting through school on a shoe-string budget and not taking out too many student loans, my good financial decisions were pretty much all un-done when I graduated from college in May 2012.
Here are a couple financial mistakes I made after college, and another that others around me made too.
Giving in to Lifestyle Inflation
We all know that lifestyle inflation is evil not a good way to spend your money. But it can be hard to want to maintain your broke college student way of life when you graduate and suddenly find yourself making more money. There are some lifestyle inflations that are okay, and probably even smart, to starting spending more money on, but others are just silly and a waste of money.
For example, increasing your food budget so you don’t have to live off cheap junk food is a good lifestyle inflation decision. Getting a TV subscription when you never watch TV is not a good spending decision. Giving in to lifestyle inflation is one of the mistakes I made after college.
Spending Money Before You’ve Earned It
Right after college I got in the habit of spending my paycheck before I’d even earned them and before they were in my bank account. I charged a lot to my credit card with the thought that I’d be able to pay it all back when I got paid next week or whenever because I was making so much more money. In reality, after taxes, retirement savings, and paying required bills, I never had enough left to pay off my latest purchases. Instead of realizing this early on, I continued to spend more than I made and before I had the money in my account for several months.
Being Too Good to Take a Job
My college friends and I had lots of interviews the last month of classes before we graduated. I was lucky because I had a job before I finished college, but a lot of my friends didn’t. One in particular ended up having to work at more than one part-time job to make ends meet while she continued to search for a full-time career-type job.
Unfortunately another friend of ours wasn’t so savvy. She decided she was too good to go back to waitressing while looking for a career-type job and instead had she had no income coming in at all and she charged all of her living expenses to credit cards during her period of unemployment.
Graduation should be a happy time during your life. No matter what your job or financial situation is, you should avoid making the mistakes my friends and I made when we were new grads just a few years ago.
Did you make any financial mistakes when you were a new grad?
I actually did really good as a new grad and didn’t really fall into any of these financial mistakes. Although, I was one of those lucky ones that landed a job in my field right away. Since I was laid off last year, however, I’m pretty sure I’m guilty of doing all of these things! Especially that whole spending money before you make it, thing… 🙁
I landed a job in my field right away too, but I still made some of these financial mistakes. 🙁
This is really true Kayla, I noticed that some of the new grads usually fall into lifestyle inflation. Especially when they received their first salary and they think that they should upgrade their lifestyle.
I definitely fell for that one!
I used to spend money before I received my salary. This was really mistake, but I corrected it when I realize that I already used up my salary one week before getting again my salary.
I know what you mean! I used to do this too, but I’m trying to get better about it. It gets easier the more I earn.