4 Smooth Moves for Graduates
You've graduated after four, six, or eight long years of college and now it's time to shout, "Hello world, I'm here!" You're eager to act, work and live like an adult and expect Mr. World to shout back, "Welcome, we've been awaiting your arrival!" Unfortunately, that's not the way it will really happen.
There are lots of graduates trying, like you, to rock the world and many other professionals who are unemployed and still trying to nab a job offer. So, you must do everything possible to polish up your personal life and beef up your financial profile to stay near the front of the line. To effectively choreograph your career, you must implement these four moves.
The Debt Tango
Take control of what you owe before your debts control you. Do you have credit card debt and student loans? Even if you have student loans that aren't payable for six months, think about them now and devise a plan of action. List all of the debts you owe, when they are due and how much you'll need to make timely payments each month.
It has been stated many times (but can't be emphasized enough): One of the most important influences on your life is your credit report. From the instant you take out a student loan, personal loan, checking overdraft account, or credit card — basically any loan — this report will stick to you like glue, keeping a running tab on your financial behavior. If you aren't responsible in handling your debts, your low credit score will feel like cement shoes, preventing you from moving forward.
Potential employers, landlords, lenders, utilities and insurance companies will evaluate you based on credit report and score. A low score signals to an employer that you probably won't be a responsible employee, and lots of debt means you may be more likely to steal. Landlords won't want you as a tenant if you have a history of being late on payments, and lenders, utilities and insurance companies will charge you a higher interest rate or require a bigger deposit if you are perceived to be a higher credit risk. So start off on the right foot, and face your debts head on.
The Money Mambo
While in school, you might have had an allowance from your parents or student loans that covered living expenses. Now that you've graduated, even if you're still living at home, it's time to start acting like the managing partner of your money.
Cash flow measures the money coming in (earnings) versus the money flowing out (expenses). Monitoring your cash flow is much easier if you create a budget. Keep track of your monthly earnings and spending, prioritize your financial needs and wants, and make adjustments where necessary. You and your money should be in sync. Unfortunately, you might not get a full-time job right away; don't just sit around and hope for the best. While you wait, go after one or two part-time jobs to create a source of income and to stay connected to business people and the job market.
Finding success in the work-a-day world will take motivation, financial organization, perseverance and hustle. Making smart money moves early will establish a good money management routine and lead to long-term financial health.
The Job Jive
Your attractiveness to an employer hinges on your personal, financial and professional profile. The actions you take, messages you send, and pictures you put on your "wall" will be viewed by everyone, including employers. Make sure your grandmother and potential employer would be happy reading or seeing anything about you or from you on Facebook, MySpace, Twitter, LinkedIn and any other social media sites. Know that employers are looking you up — Googling you — before making a hiring decision. (Google yourself to see what comes up!)
The old saying "it's not what you know but who you know" is particularly true these days. If you don't have a ton of connections in the business world, think about how you could network within the community or volunteer to help a nonprofit organization that appeals to you. Attend school alumni events. If you have a graduate degree, you're eligible to join a Young Professionals group even without a full-time job. Also, keep in mind that first impressions last. Be thoughtful about your appearance and dress professionally when appropriate.
Work hard on creating an energetic, accurate and memorable resume. There are lots of resume-building sites online to help with the latest formatting and "buzz words." A resume should be short (one page). Include accomplishments you're most proud of, the challenges you've met, and the skills you've learned that will be assets to the hiring company. Mention extracurricular talents and involvements, anything that will make you stand out (in a good way). The potential employer wants to understand your value-added to them, not what they can do for you.
The Savings Swing
Once you get into the swing of budgeting and money is coming in on a consistent basis, start implementing a weekly or monthly savings strategy. Regular savings will allow you to:
- Handle an emergency expense (e.g. a car repair)
- Build wealth (e.g. buy investments)
- Attain short-term goals (e.g. a vacation or new TV)
- Realize long-term goals (e.g. buy a house, or secure your retirement)
Even if you're in your early twenties, get into the saving routine. (You must have heard about the power of compounding, which simply means the longer your money can grow through interest and interest on interest the bigger the sum you'll accumulate.) A simplified example: saving $50 each week or $200 per month assuming a compounded 5% interest rate, in forty years will turn into $300,000.
Your employer may offer a qualified retirement plan, usually a 401k. Set up an automatic deduction from your paycheck into the plan, even if it's only 1-2% in the beginning. You'll get tax-deferred growth, reduce your income tax bill and be on your way to a more financially secure retirement.
Learning the right steps to kick-start your career and making good moves throughout your personal, financial and professional lives will reward and empower you. Today's economic climate doesn't set a very welcoming stage, but as Bruce Lee said:
To hell with circumstances, I create opportunities.
This is a guest post by Hollis Colquhoun. Hollis has over 20 years of experience in the financial industry, is an Accredited Financial Counselor and co-author of Women Empowering Themselves: A Financial Survival Guide. Contact her at Women Empowering Themselves. Here are more articles by Hollis: