RANDOM THOUGHTS #98
Steve Cole muses:
There really should be a book GROWN UP FOR DUMMIES that tells people everything they need to do when they graduate from college and enter the workforce. Joel Shutts, our graphics intern, recently graduated from college, conducted a brief but effective hunt for a professional graphics job, and officially became a "grown up." There are a lot of things that happen at this point in your life, and there really isn't a book explaining all of them. The mental shift from "college student just getting by on as few dollars as possible" into "employed worker who needs to act like a grown up in society" can be confusing, even jarring. I've seen too many young people get themselves in trouble (or miss opportunities). Normally, you have parents to help you with this, although Joel's parents aren't even in this hemisphere and more than a few young people don't have a working relationship with their parents. Leanna and I have kind of taken Joel as "an honorary nephew" and tried to point him in the right direction. This blog cannot cover what needs to be a whole book, but let me hit the high points. No two situations are the same, and many parts of the transition happen at different times for different people. (Joel moved to his own apartment long before graduation. Leanna got her own apartment just days after graduation. I graduated, then lived with my folks until I got married. Steven Petrick graduated and entered the Army.)
1. Take a deep breath. Give yourself a day to enjoy being out of school, then later give yourself a day to enjoy starting a full-time job. Take it all in. Think things through. Major life-changing events (the change from student to worker, the change from single to married, inheriting a big chunk of money) do strange things to your brain and you should not do anything in a hurry.
2. Do a complete and major financial assessment of your situation before vs. after graduation. Your old sources of income (student aid, student loans, part-time after-school jobs, money from family) just stopped and your new source of income (your full time paycheck) just started. Your old expenses (tuition, books) just stopped and new expenses (a different place to live, taking over things your parents used to pay for you) just started. (Hint: Avoid taking on a lot of new responsibilities -- like buying a new car -- right away.) In theory, you suddenly have a lot more money. (If you have student loans, the time when they keep giving you more money is over, and the time you have to start writing checks to pay them off has started. In that case, maybe you don't have a lot more money. Maybe you actually have less.) The point is to reconstruct your budget for the month(s) before you graduated and write a new one for the months after you got a job. Lots of things changed, as I noted above. Just writing them all down on paper can be mind-boggling but at least you'll know where you are. Allocate enough money to paying debts that you're out of debt as soon as possible, preferably no more than two years. Minimum payments isn't going to do it.
3. Look ahead at the next year or two. Is there some big expense out there (a wedding, a period of lower income, travel home for Christmas) that needs to be budgeted and saved for? Better to build that into the budget right now. Dave Ramsey recommends that your first step is to put $1000 in the bank and leave it alone. That's for emergencies, not for Christmas shopping. That thousand bucks means that a disaster (like major car repairs) is only an inconvenience. Of course, you want to steadily build up your savings. In the "normal" course of events, your future includes some major expenses (a new car at some point, an engagement ring, a wedding, the down payment on a house) and you need to accumulate money. Nobody says you have to live like a monk, but you don't need to spend every dime and run up your credit cards besides. (Speaking of credit cards, pay them off every month. Or just buy stuff you can afford with checks and cash.)
4. Get a lot of advice from other grown-ups, people who entered the work force a year or two (or a decade or three) before you did. Ask them for their advice, and for their now-funny stories of the stupidest things they did. (We all did something stupid, sometime. It's how we learn.) Read a book or two on personal money management (and on getting out of debt if that's a factor).
5. Celebrate a little, but responsibly. Assuming your new budget has a surplus at the end of the first month, put half of it in the bank (or debt payments), then spend the other half. Spend some of it on some big item you really need and will have for a long time. (It will remind you of your graduation.) Spend some of it having fun. See a movie every night for a week. Go to a nice restaurant and order a very expensive steak. Take a weekend to drive to the mountains or the sea shore. Just don't do something that gets you arrested or injured. No drunken binges, no sky diving, no tattoos, no celebratory shoplifting. Comprende?
6. Maybe you lived in a dorm or with your folks or in a cheap student apartment. If so, moving to a new nicer apartment is going to be a chore. (If the apartment you had as a student is good enough for an employed single adult, you've already done part of this step.) Take time to find the right place, near work and things you like to do, at the right price. The bigger issue isn't going to be finding a place to live but setting up a household. Your parents have a house full of stuff (that they accumulated over years), and maybe if you lived in a dorm you had the first bits and pieces of that stuff (a few odd dishes and cooking pots, some sheets, a few tools), but setting up your own grown-up apartment means buying a lot of stuff. Don't try to buy it all in one day. Buy it as you need it, and don't try to find an excuse to buy something that the salesman is pushing you to buy, or something you don't want but all of your friends have. Don't buy the fanciest stuff, and make do with hand-me-downs if you can. You can get a lot of stuff at garage sales and it will last until you accumulate money and experience and want to replace it with an upgrade.
7. Some of the things you will need to buy: Enough dishes, pots, pans, and appliances to cook a holiday dinner. (Start with four place settings of white dishes, a reasonable set of stainless tableware, a decent non-stick frying pan, a few cooking spoons, a spatula, and a couple of saucepans.) Enough tools to do whatever you need to do around your house. (At minimum, a small hammer for hanging pictures, a few screwdrivers, a pair of pliers, and a tape measure. If you don't know what to do with a certain tool, get a friend or relative to show you before you decide to buy one.) Furniture. (You can probably start by shopping the attic or storage area of your parents and grand parents. Over time, you'll want to replace it with nicer stuff. When you move to a real house, you can put the old stuff in the guest room and buy nicer stuff for yourself.)
8. There are some adult responsibilities you will have to face (and just maybe your employer can help with some of these). Build a good credit history. Buy a little life insurance. (As a single person, you only need $10,000 worth of term insurance to cover funeral expenses if you walk in front of a bus. You don't want to be a burden on your parents, right? Do not let some salesman con you into "investing" in a big cash value whole life policy. That's the worst investment you can make.) Start a ROTH retirement account. (The dollar you put in there at age 23 will, on retirement, be worth a lot more than the dollar you put in at 43.) If your employer has a retirement plan, use that (especially if they match your money with their own.) Health insurance (at your age, you really just need some kind of major catastrophic coverage, not everyday stuff).
9. Pay back the kindness of friends and relatives who helped you get through school. Everyone who gave you money or stuff (dishes, furniture, a winter coat, whatever) to survive as a student deserves a thank you. Perhaps you could buy them a present or take them out to dinner. You're an adult now. When your aunt invites you to dinner, you ask if you can bring something (a bottle of wine or a pie). Or maybe you arrange to bring everything for them to cook one special meal so you can share with them your entry into the society of equal adults. Being a grown up means responsibility. You don't get a pass because you're a starving college student. You've got a full-time job, so pull your own weight.
10. Maybe you got to this point in life without a sweetheart or maybe you already have one of those. If you have one, include them in the celebration. If not, you need to think about finding one. [Seriously, you're not going to die alone 60 years from now, are you?] There is no hurry, and don't take the first one to come along, and don't take the wrong one out of desperation. Being alone is not as bad as being with the wrong person. (If you haven't dated much, this is going to be scary, but you'll survive. It was scary for everyone else when they started dating. Just remember: there is one of "them" for every one of "us," and they're every bit as nervous about dating someone new as we are.) Figure out where you will meet the kind of person you want to be with. For many, that's church, for others, that's the gym and the military reserve or the garden club or a friend of a friend. (You need someone with common interests. If you have nothing you enjoy doing together, you won't stay together.) Again, there is no hurry, but casual dating (dinner and a movie) is a way to start thinking of yourself as an adult (and it's fun). Circulate, don't tie yourself down right away, have a lot of friends and enjoy their company. (You really do not have to have sex on the third date no matter what television says.) Don't date someone with bad financial habits or a criminal record. Don't date someone who is of a different life philosophy or political party. The point is to just start dating. It's fun. Do it responsibly and respectfully and leave behind a few exes who have fond memories of something that didn't work out, not axes to grind or restraining orders.
There really should be a book GROWN UP FOR DUMMIES that tells people everything they need to do when they graduate from college and enter the workforce. Joel Shutts, our graphics intern, recently graduated from college, conducted a brief but effective hunt for a professional graphics job, and officially became a "grown up." There are a lot of things that happen at this point in your life, and there really isn't a book explaining all of them. The mental shift from "college student just getting by on as few dollars as possible" into "employed worker who needs to act like a grown up in society" can be confusing, even jarring. I've seen too many young people get themselves in trouble (or miss opportunities). Normally, you have parents to help you with this, although Joel's parents aren't even in this hemisphere and more than a few young people don't have a working relationship with their parents. Leanna and I have kind of taken Joel as "an honorary nephew" and tried to point him in the right direction. This blog cannot cover what needs to be a whole book, but let me hit the high points. No two situations are the same, and many parts of the transition happen at different times for different people. (Joel moved to his own apartment long before graduation. Leanna got her own apartment just days after graduation. I graduated, then lived with my folks until I got married. Steven Petrick graduated and entered the Army.)
1. Take a deep breath. Give yourself a day to enjoy being out of school, then later give yourself a day to enjoy starting a full-time job. Take it all in. Think things through. Major life-changing events (the change from student to worker, the change from single to married, inheriting a big chunk of money) do strange things to your brain and you should not do anything in a hurry.
2. Do a complete and major financial assessment of your situation before vs. after graduation. Your old sources of income (student aid, student loans, part-time after-school jobs, money from family) just stopped and your new source of income (your full time paycheck) just started. Your old expenses (tuition, books) just stopped and new expenses (a different place to live, taking over things your parents used to pay for you) just started. (Hint: Avoid taking on a lot of new responsibilities -- like buying a new car -- right away.) In theory, you suddenly have a lot more money. (If you have student loans, the time when they keep giving you more money is over, and the time you have to start writing checks to pay them off has started. In that case, maybe you don't have a lot more money. Maybe you actually have less.) The point is to reconstruct your budget for the month(s) before you graduated and write a new one for the months after you got a job. Lots of things changed, as I noted above. Just writing them all down on paper can be mind-boggling but at least you'll know where you are. Allocate enough money to paying debts that you're out of debt as soon as possible, preferably no more than two years. Minimum payments isn't going to do it.
3. Look ahead at the next year or two. Is there some big expense out there (a wedding, a period of lower income, travel home for Christmas) that needs to be budgeted and saved for? Better to build that into the budget right now. Dave Ramsey recommends that your first step is to put $1000 in the bank and leave it alone. That's for emergencies, not for Christmas shopping. That thousand bucks means that a disaster (like major car repairs) is only an inconvenience. Of course, you want to steadily build up your savings. In the "normal" course of events, your future includes some major expenses (a new car at some point, an engagement ring, a wedding, the down payment on a house) and you need to accumulate money. Nobody says you have to live like a monk, but you don't need to spend every dime and run up your credit cards besides. (Speaking of credit cards, pay them off every month. Or just buy stuff you can afford with checks and cash.)
4. Get a lot of advice from other grown-ups, people who entered the work force a year or two (or a decade or three) before you did. Ask them for their advice, and for their now-funny stories of the stupidest things they did. (We all did something stupid, sometime. It's how we learn.) Read a book or two on personal money management (and on getting out of debt if that's a factor).
5. Celebrate a little, but responsibly. Assuming your new budget has a surplus at the end of the first month, put half of it in the bank (or debt payments), then spend the other half. Spend some of it on some big item you really need and will have for a long time. (It will remind you of your graduation.) Spend some of it having fun. See a movie every night for a week. Go to a nice restaurant and order a very expensive steak. Take a weekend to drive to the mountains or the sea shore. Just don't do something that gets you arrested or injured. No drunken binges, no sky diving, no tattoos, no celebratory shoplifting. Comprende?
6. Maybe you lived in a dorm or with your folks or in a cheap student apartment. If so, moving to a new nicer apartment is going to be a chore. (If the apartment you had as a student is good enough for an employed single adult, you've already done part of this step.) Take time to find the right place, near work and things you like to do, at the right price. The bigger issue isn't going to be finding a place to live but setting up a household. Your parents have a house full of stuff (that they accumulated over years), and maybe if you lived in a dorm you had the first bits and pieces of that stuff (a few odd dishes and cooking pots, some sheets, a few tools), but setting up your own grown-up apartment means buying a lot of stuff. Don't try to buy it all in one day. Buy it as you need it, and don't try to find an excuse to buy something that the salesman is pushing you to buy, or something you don't want but all of your friends have. Don't buy the fanciest stuff, and make do with hand-me-downs if you can. You can get a lot of stuff at garage sales and it will last until you accumulate money and experience and want to replace it with an upgrade.
7. Some of the things you will need to buy: Enough dishes, pots, pans, and appliances to cook a holiday dinner. (Start with four place settings of white dishes, a reasonable set of stainless tableware, a decent non-stick frying pan, a few cooking spoons, a spatula, and a couple of saucepans.) Enough tools to do whatever you need to do around your house. (At minimum, a small hammer for hanging pictures, a few screwdrivers, a pair of pliers, and a tape measure. If you don't know what to do with a certain tool, get a friend or relative to show you before you decide to buy one.) Furniture. (You can probably start by shopping the attic or storage area of your parents and grand parents. Over time, you'll want to replace it with nicer stuff. When you move to a real house, you can put the old stuff in the guest room and buy nicer stuff for yourself.)
8. There are some adult responsibilities you will have to face (and just maybe your employer can help with some of these). Build a good credit history. Buy a little life insurance. (As a single person, you only need $10,000 worth of term insurance to cover funeral expenses if you walk in front of a bus. You don't want to be a burden on your parents, right? Do not let some salesman con you into "investing" in a big cash value whole life policy. That's the worst investment you can make.) Start a ROTH retirement account. (The dollar you put in there at age 23 will, on retirement, be worth a lot more than the dollar you put in at 43.) If your employer has a retirement plan, use that (especially if they match your money with their own.) Health insurance (at your age, you really just need some kind of major catastrophic coverage, not everyday stuff).
9. Pay back the kindness of friends and relatives who helped you get through school. Everyone who gave you money or stuff (dishes, furniture, a winter coat, whatever) to survive as a student deserves a thank you. Perhaps you could buy them a present or take them out to dinner. You're an adult now. When your aunt invites you to dinner, you ask if you can bring something (a bottle of wine or a pie). Or maybe you arrange to bring everything for them to cook one special meal so you can share with them your entry into the society of equal adults. Being a grown up means responsibility. You don't get a pass because you're a starving college student. You've got a full-time job, so pull your own weight.
10. Maybe you got to this point in life without a sweetheart or maybe you already have one of those. If you have one, include them in the celebration. If not, you need to think about finding one. [Seriously, you're not going to die alone 60 years from now, are you?] There is no hurry, and don't take the first one to come along, and don't take the wrong one out of desperation. Being alone is not as bad as being with the wrong person. (If you haven't dated much, this is going to be scary, but you'll survive. It was scary for everyone else when they started dating. Just remember: there is one of "them" for every one of "us," and they're every bit as nervous about dating someone new as we are.) Figure out where you will meet the kind of person you want to be with. For many, that's church, for others, that's the gym and the military reserve or the garden club or a friend of a friend. (You need someone with common interests. If you have nothing you enjoy doing together, you won't stay together.) Again, there is no hurry, but casual dating (dinner and a movie) is a way to start thinking of yourself as an adult (and it's fun). Circulate, don't tie yourself down right away, have a lot of friends and enjoy their company. (You really do not have to have sex on the third date no matter what television says.) Don't date someone with bad financial habits or a criminal record. Don't date someone who is of a different life philosophy or political party. The point is to just start dating. It's fun. Do it responsibly and respectfully and leave behind a few exes who have fond memories of something that didn't work out, not axes to grind or restraining orders.
posted by Federation Commander at 12:55 AM
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