Graduation day will be one of the most exciting and memorable days of a persons life. Whether it’s a young person graduating from high school or someone who has obtained their college degree the feeling of hard won accomplishment is like no other.
Graduating from school can also bring some stress that did not exist before that day. When a person graduates it is often seen as the start of their life. For a young person it will be expected that they will be striking out on their own, learning to live life as a full-fledged adult. That being said, a new graduate should look hard at the realities of upgrading or changing their lifestyle before any drastic changes are made.
The choice of a lifestyle upgrade will largely depend on whether or not the student has been working while in school. More often than not the first major purchase a young person will make is a car, which in turn may cause a monthly car payment along with monthly car insurance payments. If the new graduate lives with their parents, moving out on their own is another wish to check off the list which in turn causes another monthly payment to consider. Living on your own also means paying utility bills for your dwelling, buying groceries, paying for your communication device (i.e. cell phone) and being responsible for your own health care.
Unfortunately what this can sometimes cause is a young person with too much debt to handle. Most new graduates are working entry level jobs which may not pay too well. Add to that the peer-pressure of buying designer clothes or eating at the latest trendy restaurant. Suddenly that paycheck is not quite big enough and the car payment starts to fall behind schedule, or a credit card payment is not made on time. Now you have the making of a disaster that will affect the new graduate for years to come. As soon as you are late with a payment your credit report is impacted in a negative way. Once you have a negative item listed on your credit report it could take months or even years to have this item removed from your report. Understanding how your credit report works and keeping it up to date and correct is one of the most important things anyone can do for themselves. Thousands of people have their identities stolen every month simply because they have no understand of how a credit score is calculated and how to keep their credit report “clean”.
Graduation is an exciting time and it should be enjoyed and celebrated. Having the ability afford a lifestyle upgrade is also something to be excited about, but must be thought our carefully and realistically. Maintaining a budget, sticking to it and starting a retirement account may seem like something far out in the future but the sooner you start the easier you will find life to be later. The years go by faster than you may think.