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Managing Life After Graduation

For the past four years, many individuals entering the workforce were completely immersed and focused on their goal of graduating from college. For many of these new graduates, they probably did’t lend much thought to how much stress comes after college, including paying off school loans and securing a good job in an increasingly competitive workforce.

Regardless of how large your student debt load is or what job you end up with, there are ways to deal with the stress and worries of post-graduate life in a productive and healthy way. If you want to become more financially secure and worry-free individual, here are three ways to effectively manage the challenges of life after graduation:

Paying Off Loans

Obviously, once you graduate, you have to start worrying about paying off your student loans. Americans collectively have over $1.5 trillion in outstanding student debt, with women carrying a disproportionate 2/3 of this shocking sum. While there is a 6-month grace period before your first payment will be due, it’s hard to ignore the interest that is accruing with each passing day.

The sooner you can get your student loan debt paid off, the better. One sure-fire way to reach this goal sooner is to pay more than the minimum. Even if it is only a few dollars more than the minimum payment, the overage you pay is applied directly to the principal. If you can’t afford to do that, it is important to make the minimum payment on time. To ensure never missing a payment, it is advisable to set automatic payments to avoid a possible hit to your credit score.

Paying Down Credit Cards

Just like student loan debt, Americans are also up to their eyes in credit card debt. The big difference is, while student loan interest rates are usually between 4 to 6%, the average credit card APR is a whopping 15%. Even if you’re making the minimum monthly payment, you’re barely doing anything but covering the interest. The sooner you can pay down your credit card debt, the sooner you can stop throwing your money away and apply it to more productive purposes.

If you have more than one credit card and feel overwhelmed by all the debt you need to pay off, try the following:

  • Take a deep breath. It will all be okay.
  • Choose a debt repayment method like the snowball method, coined by Dave Ramsey.
  • Call the credit card company and ask them to reduce the interest rate. Also see if they can waive any late payments. Oftentimes, they will do this if you ask.
  • Start making payments until you’re free of this debt.
  • Minimize your spending as much as you can, particularly recurring charges that go on your credit card.
  • Use only cash or your debit card.

Save For a Rainy Day

Otherwise known as creating an emergency fund, saving for a rainy day can help ease so many tensions. After all, unexpected emergencies pop up for everyone, and if you want to avoid the need for title loans or falling back on credit cards, the key is being prepared.

Dave Ramsey, the best-selling author of personal finance books, suggests creating an initial emergency fund of $1,000, or at least $500. Once you have that saved, it is essential to leave this money untouched until it is needed, like for a vehicle repair, medical bills, or other expense that would otherwise end up on a credit card.