More Money……More Problems

Most of you have been managing money since you got to college…whether your managing student loans, or income from your part time job, or your parents “allowance”. Whatever your situation, everyone thinks they have a pretty good understanding of how to manage money. So now you graduated college, got a fancy job and now you just have more money to manage. Easy right? I mean if you could manage student loan income, part time work income, you should surely be able to manage 40 or 50 thousand a year.

Unfortunately for all of us it’s not that simple, as a wise man once said “more money, more problems”

First and the biggest mistake most of us make, is over estimating our income, and also not living on a budget. What do I mean by over estimating income? Most of us look at income as it relates to our expenses, when you are in college your expenses are minimal, it’s usually tuition or books or for some people even rent. For the first few months after we graduate we still think in those terms, that’s why we end up over estimating our income. So we buy that new car, that maybe we just don’t need because we think we can afford it, we move out of the parents house and get a place, that maybe out of our price range. Before we know it, we are living pay check to pay check and now are completely reliant on outside sources to support ourselves. My advice to all college kids about to graduate is to start with a budget. I don’t mean a budget that restricts you from having fun or a life, but more along the lines of a guide. So you know what you are spending month to month on food and entertainment, and what you can really afford in terms of that new car, or house or vacation.

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