7 Post-Grads On Their Biggest Financial Shock (And How To Deal With Them)
At our various graduations, we walk confidently across the stage as our name is mispronounced to the crowd, accept the slip of paper that reads “Diploma Coming Soon,” switch that tassel from left to right, and are told that we are ready. We have been preparing for this moment for X number of years, but how prepared are we? Obviously, this varies from person to person, but overall there are consistent aspects of daily life that we are shocked by once confronted. I graduated last year (2014), and had a relatively seamless transition from school to work. I was one of the very lucky ones who was able to secure a job, a comfortable living situation, and stayed in a city I already knew. Even though life was pretty copacetic, a few financial obstacles popped up to surprise me during the transition. Turns out, I wasn’t alone.
I asked several 20-something friends what the biggest personal finance surprise was for them after graduation. Essentially, I facilitated a discussion between my peers, and then catalogued their answers below, while providing my own solutions on how to tackle these issues. In the interest of full transparency, I have to say that all of the people I surveyed were lucky to have the opportunity to attend a four-year college, which I understand is a luxury. The friends surveyed and I realize that we are insanely fortunate to be shocked by some of the financial realities below. I think it’s important to discuss these shocks — no matter how big or small they are — because they really did take my peers by surprise, and we could all stand to be better prepared. Here are seven things that shock post-grads after college, and how to deal with the shock:
“Food”
It turns out having to feed yourself on a regular basis without a 24-hour dining facility was a reality check for some. Many of us do our best to save money by meal planning and grocery shopping, which works out really well, until life happens. You can shop, plan and cook all you want, but there are times that you’ll be working longer hours than expected, or a new friend will propose a happy hour or dinner that you don’t want to turn down. My friends were in resounding agreement that grocery shopping and cooking definitely saves money – but were also in agreement that they commonly buy too much food, spend too much money and often ended up letting food go to waste. It seems like college didn’t quite prepare us for the days of budgeting for groceries — even for those of us who lived in apartments during college.
My solutions: We talked through a few ways that you could conquer the financial burden of our healthy appetites. First of all: Be honest. You aren’t going to eat a homemade salad with the same ingredients for lunch and dinner five days of the upcoming week. If you don’t think you will – you won’t. So, rather than spending $40 on a large tub of spinach, fancy dressing, dried cranberries and your other salad fixings that could go bad by the end of the week, be realistic about how much you should buy. Also, refer to TFD’s rules for spending less while food shopping.
“Being on your own insurance.”
Basic health issues were rarely a financial concern when going to school or living with our parents. If you had a cold, or some form of small ailment, you could go to the student health center, and charge the copay to your school cash-card. Now that we’re post-grads, getting sick can be a financial and emotional shock.
If employed with benefits, getting the top-rated health insurance plan drains money out of your paycheck every month. Furthermore, you have to grapple with the emotional debate of self-evaluating whether you should work from home and protect your coworkers, or “suck it up” and go into the office. (Personally, I say you should stay home. Sick days aren’t for you – they’re for everyone else.) If you do choose to go the doctor, you are faced with paying for the copay, the medications and the chicken noodle soup your parent isn’t there to coddle you with.
My solutions: Protect yourself at your most vulnerable. Drink some extra OJ as the seasons change, and get a good night’s sleep after you travel. Fighting off illness and colds before they start is the cheapest way to keep yourself healthy.
“Commuting.”
Traveling from home to work and back every day is more expensive than most of us thought it would be. For those of us who do not have commuter benefits at work, riding the metro or subway slowly drains money out of our accounts each month. In Washington, DC, it costs at least $2.50 to take the metro (even taking it one stop!). In New York, paying for the unlimited subway pass every month costs a cool $116 – and heaven forbid you lose your Metrocard.
My solutions: Unfortunately, the bleak reality that is commuting comes with only a few solutions. In the warmer seasons, try to find alternatives, like walking or biking. Also, double-check your benefits package at work, and make sure you’re taking full advantage of pre-tax or other commuter benefits.
“Transportation…. All of it.”
According to my 20-something friends with their very own wheels, the money it takes to own a car was one of the biggest financial surprises after college. Paying for car insurance and having to pay for the random mishaps that can happen to that precious hunk of metal can put quite the dent in your monthly budget. The realities of owning a car are something one can prepare for, but you can’t always avoid accidents or small damages in order to keep a handle on your finances.
My solutions: Carpool. Many companies offer carpool incentives — especially in driving cities like LA — and then you have someone to split gas with.
“Utilities.”
Rent is a real bitch, but most people I know had a general grasp on its usual suckiness before entering the post-grad world. Utilities, on the other hand, are a financial burden that came crashing quickly down. For some, the cost of hot water, heating or cooling systems was baked into the often high cost of living in college dorms. However, as we start leases that do not have utilities included, the amount of energy, gas and water we use can be a make-it or break-it aspect of our monthly budget.
My solutions: Cut down on heat in the winter — try to lower it when you leave the house and go to sleep. Do the same in the summer with your air conditioning. Be diligent about turning off lights, and if you don’t need a premium Internet and cable plan, go for a cheaper option.
“Student loans.”
Other than saying “I feel you,” I don’t think I can add anything revolutionary to this financial shock. For some solutions on how to face your student loans head on, see some wise words housed on TFD.
“Socializing and networking”
Post-graduate time is filled in a variety of ways, ranging from the job search to trying to make new friends in a strange city. If you’re just starting at an entry-level job, chances are you will want to schedule happy hours, coffee, or go to events where you can socialize with your new co-workers. Those require money. My friends in law, medical or graduate school, say you’re no longer socializing with those who are mostly your age. When they offer to buy a round of drinks after your first exam, you might feel pressured to buy the next round, and so on.
My solutions: I recently wrote an article on how to mingle with new friends, without the pricey cocktails. I suggest you get outside with your new friends, or host them at home instead of going to a fancy bar.
Lizzie is a communications professional based in Washington, DC. When she isn’t at work, you can find her at dance rehearsal or eating – but probably eating. Follow the frolic on Instagram.
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