Common Mistakes Made by College Grads
The Common Mistakes College Grads Make
You made it through the sleepless nights of studying, coffee-fueled assignment and project completion, and the mind-boggling stress of finals. Congratulations and celebrations must be in order. Life after graduation is a whole different experience. The thought of stepping into the professional world thrills you; on the other hand, the end of college days saddens you. The excitement for new beginnings motivates you, while the worry of the future keeps you nervous.
You are now a young adult, financially independent, and professionally inexperienced. Navigating through life’s problems sitting in a cubicle is far more complicated than managing everything from your college’s dorm. You have to repay the loan while earning a full-time salary. You have to take a lease for a place to live. You might have to restrain yourself from purchasing a new pair of expensive shoes. Most importantly, you have to start saving. Quite indeed, no recent college graduate is prepared for the next chapter of life and entering the real world.
So, if you are trying to get a grip on adulting, make sure to avoid these common mistakes, and you will stay ahead in the game of real-world life:
Mistake 1: Unreasonable housing expenses:
There is no one way to strategize your personal finances, but an absolute rule of thumb can help you manage your finances. Determine a certain percentage of your salary to invest in housing. Make sure to stick to that defined criteria. Since most of the grads look for jobs in cities, the higher living cost with pricey monthly rents makes it difficult to manage expenses. Most of the college grads end up giving more than half of their salary in rent.
If you can’t afford the expensive rents near your office, look for a roommate to share the rent with. In case you prefer living alone, find a place on the outskirts of the town with less expensive rent and ease of commute. However, finding a job in your local town and living with your parents for some time until you have enough financial resources can help a lot with expenses.
Mistake 2: The first job will be the dream job:
Every college grad wants to live the American dream of a luxurious lifestyle and expensive living. The dream shatters when reality strikes you. At the beginning of your professional career, you will only land jobs and secure positions to support your lifestyle. Only the slightest percentage of fortunate grads are able to secure a high-paying job in the first attempt. The journey to landing the first-ever job is nothing but a series of countless interviews for many fresh grads.
Having the motivation to get your dream job and an end goal in mind will keep you ambitious in your professional life. However, it is quite unlikely to step into that dream role right after graduation. Accepting smaller roles and less-paying jobs will equip you with the necessary skills and significant experience needed for your dream job.
Mistake 3: Submitting an application for unrealistic jobs:
A well-thought-out job search is one of the crucial phases in life after graduation. Make sure not to submit applications for jobs you are not qualified for. Before applying for any role and position, read the requirements to know if the job would help you move forward in your career or not. Applying for every job and role that you come across makes you look desperate and uncertain about career goals. Search for the positions that will help you in your future career and submit applications for jobs that you are qualified for.
The job hunt is an intensive and often exhausting process, so keep an end goal in mind and navigate your search accordingly. Aim for a role that will give you experience and the expertise needed to grow your skillset. Smaller roles provide you with sufficient learning opportunities; make sure to capitalize on that. Determine the necessary measures to gain a higher position and work towards your goals.
Mistake 4: No plan for student loan repayment:
Most of the college grads complete their graduation through student loans, and after graduation, they are bound to repay it. In case you have any student loans and debts, you have to reduce your expenses on housing and rents. Student loan programs offer a grace period to grads, so most of the recent grads spend their income on housing without knowing about the repayment plan. In the repayment plan, the students have to pay a certain fixed amount every month, which adds to their monthly expenses.
Make sure to figure out the monthly amount before signing any lease and rent contract. Set your monthly budget while factoring in the student loan repayment amount. Once you have a clear idea of how long it would take to repay the entire loan, you can easily draft your housing and living plans.
Mistake 5: Saying no to risks:
Colleges prepare you for the corporate world and 9-to-5 professional life. Throughout college life, students focus on making careers for luxurious living. However, not every individual is meant for 9-to-5 corporate life; some are natural entrepreneurs and business-makers. The opportunity to be your own boss and control the salary keeps them motivated to start a business right after graduation. The idea of launching a business after graduation might sound impractical and unreasonable, but sufficient time management can help in doing so.
Although it doesn’t mean to stay unemployed after college, if you could find an incredibly affordable housing facility or a roommate to share rent, you can dedicate half of your time to grow your business while saving money from a part-time job.
Mistake 6: Taking up a bad job:
Your first job doesn’t have to be a dream, but that doesn’t mean you should accept a bad job. A job that doesn’t compliment your skills and relates to your expertise won’t add any value to your working experience. The job hunt is a tiring process that can make the applicant desperate and impatient. Some grads get so distressed that they are ready to accept any job position that opens up. The misconception of a bad job is better than no job has ruined the careers of many and led many fresh grads astray in their career paths.
It is important to wait for positions that match your qualifications to open up before opting for a bad job. Having a job and a constant income source for cash flow is essential but waiting for the relevant positions is worth the time and effort.
Mistake 7: No money-saving plan:
Saving is more of a habit and less of a thought-out money strategy. Most Americans live paycheck-to-paycheck without planning for savings. Most recent grads are guilty of the dangerous blunder of “saving later”—that later never gets translated to now and today. The better move is to get in the habit of saving now. Even if it means starting from a trivial amount, make sure to put a certain amount aside from daily expenses.
Set up a savings account and start an automated recurring transfer on your salaried account. A certain amount of money cashes out from your salaried account and into your savings account with this automatic system. Once you are in the habit of saving, it becomes an obligatory deed instead of an afterthought.
Mistake 8: Overspending:
Another mistake that most recent grads make is spending more than the salary and average cash flow. Now that the days of cheap ramen and beer are over, most college grads splurge on changing lifestyle. The fact is most of the grads are underpaid and working jobs for which they are over-qualified. Splurging on an impulse will only disturb the monthly budget while stagnating your saving account, if any.
The best way to avoid overspending is to find housing with affordable rents and stick to the budget. Renting a luxurious apartment is surely tempting, but opting for cheap options while your career is in infancy might prove beneficial in the long run. Now that you are in control of your finances, know the difference between needs and desires. Food, water, electricity, and gas are the necessities of life, but you can live without that new pair of shoes that you wanted so badly.
Having a clear picture of your financial situation and future goals helps you in surviving corporate life. Recent grads are not aware of what the real world holds, which leaves them distressed and broke. If you are looking for career and money guidance, get in touch with our experts and check our typical expenses plans for young adults.