Budgeting, Cars, Credit Cards, Debt, Education, Insurance, Personal Finance, Saving Money, Work

23 Pieces of Advice that College Graduates Don’t Want to Hear

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You’ve finally done it — earned that coveted diploma. You’re feeling a bit cocky. Your parents are wondering why they had to pay for your expensive education when you already knew everything.

Now it’s time to enter The Real World, the place that you have talked about for years as if it were a planet in a distant galaxy. There are definitely things you need to know about life in your new reality. Some of it may sound vaguely familiar and ho-hum. Or it may be written in the foreign language of that planet. But one thing’s for sure: you don’t want to hear about any of it. Here are 23 pieces of valuable advice, in no particular order. Ignore them at your peril.

Show up at work

Some people got through college without going to class. I don’t know how they did it. I guess I wasn’t smart enough. It’s a whole new ball game in the working world. It’s no longer cute to oversleep or be unable to get out of bed because of a hangover. If you take too many “sick: days, your income may suffer and you could even lose your job.

Deal with your debt before it gets worse

Most college grads have debt, either from student loans, credit cards, or both. While you may have a six-month honeymoon period before the first student loan payment kicks in, credit card and other revolving debt never sleeps. The first step is to stop charging stuff which would make the problem exponentially worse. And the second is to come up with a repayment plan that cuts your debt down faster than it grows.

If you don’t have any credit, get some

Congratulations if you escaped the evils of credit card gluttony while in college. However, in The Real World, your credit record is the passport to critical adult life activities. It’s very difficult to rent a car or a hotel room without a major credit card. If you want to buy a car and can’t purchase it in cash, you may need to finance it. More employers are checking credit reports when selecting employees and they may favor a candidate with a good credit history over someone with poor or even no history at all. Buying a house may not be on your list of things to do this year. However, it takes years to establish good credit, so start right away.

Don’t rush to buy all the expensive toys and trappings of adult life

You are finally earning a real salary. After a meager life as a struggling student, it’s intoxicating to have a big check regularly deposited in your account. Your first reaction is to spend it. After all those years of deprivation, it’s time for a nice car, fancy clothes and of course the HD TV, right? Be patient. You have your whole life to get the good stuff. Go back to Piece of Advice #2. Debt has an ugly way of kicking you in the backside when you’re not looking.

Don’t screw over landlords or utility companies

You’re not living in a dorm room anymore. If you don’t pay your rent or you throw too many loud parties, you may get evicted. Your landlord won’t give you a reference if you were a lousy tenant. It will be difficult to get a new place to live. Reality will suddenly smack you upside the head.

Pay your phone bill, electric bill, water bill, etc. on time. Life is not good without certain basic necessities. In areas where there is a monopoly for service, for example, only one provider of electricity, you may not be able to get the lights turned on at your new apartment if you ditched the bill at your last address.

If you are having trouble paying your bills, contact the utility’s billing department right away. They may be able to work out a payment plan with you. If you bury your head in the sand and ignore mail and phone calls, you are less likely to get any help.

Spend less than you earn

The whole concept of “budgeting” is that simple. You may think you know how much you spend, but you really don’t. So for three months, write down every penny that goes out, whether it’s for a parking meter or the car payment. You will surely be surprised to see where your hard-earned money goes. This exercise will help you cut back on the stuff you “want” to make sure you get the things you actually “need.”

Don’t live with your parents forever

Sure, it may make good economic sense to move back into the old homestead for a bit. Maybe you’re still looking for your first job, or the initial salary is minimal. But don’t get too comfortable. You have to grow up sometime.

Start saving for your retirement right now

Everyone tries to drum this one into your head, right? But it is true. Leaving the working world is an eternity away when you’re just starting out. It’s sensible to start good habits early. More importantly, if you regularly invest even a small amount in your future, the Miracle of Compound Interest will turn your deposits in a nice tidy sum further down the track. There are countless illustrations of this available online which show that someone who starts at 35 or 45 doesn’t stand a chance of catching up with a person who begins saving at 25, even if the older person contributes a higher amount.

Don’t get into car accidents (or get tickets), particularly if you are male

If you are a single guy under 25, you are in the most expensive category for car insurance premiums. Have a fender bender or receive a couple of tickets, and watch those costs skyrocket. For everyone else, insurance companies may want you to be claim-free for three years before they will give you a decent rate. It’s just like debt: your actions that take only moments can affect you for years.

Don’t get married too soon

People of all ages can be particularly hard-headed about this one. The more someone tells you to wait, the more determined you are that you have found your one-and-only soul mate. No one can ever be “sure” about the future. But weddings can be very expensive. So can divorces. Don’t rush down the aisle. Enough said.

Start an emergency fund

When you’re in your 20s, you think you are invincible. Nothing bad will ever happen to you. Well, guess what? You’re wrong. Chances are excellent that you will be adversely affected by job loss/downsizing/layoff, car break downs, divorce, disability, death (someone else’s) — or several of these — and you won’t see it coming. These events can be big ticket items. If you don’t have that cushion of savings, you could be blindsided by an emergency and begin a slow economic spiral downward.

Calculate what your expenses would be if you had no income for three months, and then save up that amount. Put the funds in an account that you can access easily (i.e., not invested in stocks) but don’t make any withdrawals unless a true emergency arises.

Don’t underestimate the importance of having health insurance

A large percentage of people who file for bankruptcy did not go on big shopping sprees; they were forced to file after they got hit with medical costs they couldn’t handle. If you are considering different job offers (lucky!), don’t consider only the salary. What kind of health insurance does the company offer? Get someone, perhaps in the HR Department, to explain the different options. My own personal view is that you should get the best coverage available, even if there are less expensive options.

Get regular exercise

At college, you may have had access to excellent gym facilities and played intramural sports. When you’re on your own, it takes a bit more effort. It’s worth it because a program of regular exercise walks hand in hand with good health. Bad health is very expensive. See #12.

Eat healthy foods

You may have been living on pizza and raman noodles for the past four years. Here’s another part of life where it pays to establish good habits early.

Keep your resume up to date

The time to revise your resume is not when you are looking for a job. Every time you start a new job, revise your resume. Add your achievements, expanded duties, and awards as soon as they happen. Then if you suddenly need to look for a job, it won’t take much time or effort to have an up-to-the-minute resume to circulate.

Keep learning

Your education never ends. The older you get, the more you realize there is so much that you don’t know. Don’t develop tunnel vision. Take continuing education courses. You don’t have to master quantum physics (unless you want to). Sign up for an art appreciation course or a lecture series on a topic you know nothing about. Expand your mind.

Network, network, network

It’s “who you know” that helps you get somewhere in life. I don’t mean this in a slimy way. But people generally want to help people whom they like and respect, as opposed to strangers. Stay in touch with fellow alumni; some of the large universities have clubs in major cities.

Try to meet people who work in your current career field, or in the area you want to break into. However, don’t go anywhere with the conscious attitude that you are only there to network. People can smell it. Just take every opportunity to meet new people who may share your professional or personal interests. You might meet someone who can offer a lead on a new job or even the love of your life.

Put time and energy into worthwhile friendships

It’s far too easy to neglect your personal relationships once you start working. There are only so many hours in each day, and eventually you have to do your laundry. You may have made many friends in college and you can’t stay in close contact with everyone. But don’t abandon some of the people who were with you during a critical part of your development. And always be receptive to widening your circle. Friends will come and go, and you are lucky if you stay close to a few for many years.

Thank those who helped or inspired you along the way

Thank your parents if they supported you, whether it be financially or emotionally, on your journey. If a teacher or professor sparked an interest, let them know. It means so much to them to know that they made a difference in the life of a student.

Find a mentor

You and your friends can provide a lot of support to each other as you try to figure out the workings of the working world. It helps to find someone who, in your view, has already succeeded. At the very least, observe them and their work habits. Better yet, ask if they will take you under their wing. Most people will be flattered.

Get enough regular sleep

You must be able to function fully at work for at least eight hours per day. It’s not like your school days when you only needed to concentrate for a few hours, or you could pull an all-nighter when necessary.

Don’t eat out too often

The biggest problem with eating out is that it tends to blow the budget. It is far too easy to go out with your co-workers, or to meet friends for a drink or three that turns into dinner. It is also too convenient to grab something on the way home or to dial for delivery. Without question, making dinner is work and it takes planning. But if you track how much you spend on eating out for three months, it will probably be a rude shock. And if you put it on your credit card, it’s annoying to have to pay for it a month later when you don’t even remember what you ate.

Don’t sleep with your boss

This will almost surely lead to disaster. You may lose the respect of your co-workers and others. You may end up losing your job. How will you explain that on your next interview?

Graduates, go forth and conquer the world. Follow your dreams. Take risks. Have fun. But please follow some of this advice. Otherwise, in the not-so-distant future, in a not-so-distant galaxy, you’ll wish you had.

(Photo courtesy of John Walker)

12 thoughts on “23 Pieces of Advice that College Graduates Don’t Want to Hear

  1. Good article, I agree with everything but #3. I use a debit card to travel 2-4 times a month and the difficulty is vastly overrated.

  2. Great job of hiting on points many graduates should know as they leave the college life into the “real world”

  3. GREAT ARTICLE! This one is a keeper.

    As for #3, I totally agree. I know a girl who has no credit and just tried to get a cell phone. They wanted a $500 security deposit from her!! Needless to say, no cell phone for her until she establishes credit.

  4. Not a bad list. I wish somebody would have told me about a few of these! I’m still paying for the stupid things I did after graduating from college.

    Best of luck to any new grads who read this list…

  5. And among the most important, be patient. Meaning that unless you’re brilliant, get a large inheritance or invent the next cool gadget, you’re going to have to work your way the old-fashioned way, through hard work. Don’t expect instant gratification. Dont’ take shortcuts. It’s possible to do well in life and still live a life that’s ethical, responsible and kind to animals.

  6. These would be good for High School Graduates- the sooner the better!

    Just make it a pamphlet small enough to fit in the graduation card!

  7. Well written. Point #7 is a great one. Although living with your parents saves you money, time and effort that you can use for other things… it doesn’t teach independence/self reliance which is just as important as one’s finances.

  8. i think this list is common sense and applies not just to college grads, but to anyone reading the list….

    this list also kind of sounds like a mom wagging her finger…. i don’t know anyone who is older who actually abides by all of these items all of the time. i think before a lot of young college grads listen to this advice, they’ll probably have to make a few mistakes along the way.

    i figure mistakes aren’t that bad to make, so long as you can correct them and recover from them. i think that is more what life is about than sticking to a list that someone else made for you.

    i mean come on, if you were 20 or 21 and read this list, would you have paid attention to any of it? probably not.

  9. Great advice! Except #23. Is that supposed to be a joke or is sleeping with your boss a common problem? I thought only happened in the movies. Then again I’m a straight man and my boss is a man so its not an issue.

  10. Pingback: Hot Topics « Personal finance for the rising stars
  11. Don’t sleep with your boss? Really.. Thats the worst advice you could ever give people. Times are tough, you should do what you have to do to get a leg up on the competition. As a man if you have a female boss and you’re lucky enough to get her in bed then why not? Just don’t go bragging about it, and make sure you take pictures, they may come in handy. If your a woman then it’s actually in your best interest to sleep with your male boss for two reasons. (1) cause you can, (2) cause you can. Just as I said earlier, don’t brag about it and take pictures. For you guys that have a guy boss, offer to by him drinks, slip him a roofy, get him naked with you, and take pictures. It just that simple. For a woman with a woman boss this works just as well however to avoid killing your boss, split the roofy in half if they weigh less then 120lbs. I made this mistake one too many times.

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