Avoid Graduating with a Mountain of Debt….

If you’re graduating this spring, you’re probably dreaming about all the things that lie ahead in your life—your dream job, your dream house, and the ideal lifestyle you want to build. What you’re probably not thinking about is all of the bills you’ll now face as the bread winner in your own life. The average student loan debt in the U.S. is now over $25,000. While paying back this amount is going to take time and a good portion of your paychecks in the coming years, many student loans are fairly flexible when you’re just starting off.

Your creditors, however, aren’t as likely to be so forgiving. College grads often face harsh realities with their finances after graduating, often because of credit card debt and not understanding how their bank accounts will work post-graduation. To avoid ending up in serious financial difficulty in your first few months out of college, it’s important to have a plan in place for your financial future as early as possible.

To help you get started, consider using the following tips:

  • Know what will happen to your bank accounts: Many students have student accounts with their bank. These usually have lower fees and adjusted balance limits so students don’t have to keep as much money in your account. Once you graduate, you bank may actually change your account to a standard account without notice. If you have a low balance, you can immediately start incurring penalties and overdraft fees even if you didn’t make any purchases the day the account turns over. Knowing what’s going to happen with your accounts can help you avoid incurring fees and penalties.
  • Check your credit card contracts: Often credit cards can have introductory rates that make them more attractive for college students. You may have a card with a low APR now, but if the introductory period expires then a higher rate will start to be applied to your credit card debt. This can cause problems for your finances that you didn’t anticipate.
  • Make a post-college budget: A budget can go a long way to helping you stay on top of your finances. Make a budget using the income you will earn after you graduate. Calculate your expenses, including any moving costs you may incur leaving school, increased living expenses, and how much you’ll be expected to pay on each of your credit card bills. If you need help, you can find financial calculators online to assist in crunching the numbers.
  • Don’t ignore debt: As much as you may want to ignore any debt problems in the hopes they go away, waiting around only makes a debt problem worse. Not only do you give your debt more time to grow with interest, you also may limit the number of options you have available for debt relief. If problems with debt start causing you to be late or miss credit card payments entirely, this can decrease your credit rating. In turn, a lower credit rating limits the options you can use for debt relief. If you assess your situation and you think you’re going to have trouble, contact a credit counseling agency to find a solution for your debt problems as soon as possible.

Author: Connie Solidad has been writing about finances and debt consolidation for years. She’s an expert in the industry and writes about credit counseling, debt resulting from credit cards and debt management options. When Connie is not working, she loves playing with her two dogs in Tampa, Florida. To learn more about debt management refer to ConsolidatedCredit.org

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