Student Loans Insight

You have graduated from college. Congratulations! Now, however, comes the real test. Can you begin to pay off all those student loans and still live on the salary you will receive from your new employer?

Many times, as we exit college and step into the “real world,” we have dreamed of all those things we want to do when we are out of college and into a “real job.” We want to buy a house, get a new car, a new TV, pay down our student loans, or…you can insert your own dream here. However, we begin to find that as we step into a different living style, the money we thought was going to cover our every whim and desire just simply seems to melt away as it comes into sight. The best thing to do in this situation to give yourself a couple of years to begin to save an emergency fund before you begin to stretch and make those very large purchases.

An emergency fund is just that – a fund for emergencies. Emergencies don’t consist of TVs, video games, movie tickets and brand new BMWs. Emergencies happen when the refrigerator breaks down (and it will) and the repairman has to come out and charges you $400.00 to fix it. Emergencies happen when the transmission goes out (and they do) and the repair bill is $1,600.00. Emergencies happen when you fall down the stairs (and you can) and break your leg and can’t go to work for at least two weeks.

In order to establish this emergency fund, you might want to just continue to live like a college student. That means to continue to bike to work or keep the same car or not eat out very often. Whatever you did in college that helped you save money for college bills, continue to do. If you do this for a couple of years as you get used to paying off college loans and begin to get the hang of going to work instead of going to classes, you will soon find that you will also be able to begin to purchase some of your dream products.

However, you don’t want to do that from your emergency fund. So, for the first two years out of college, determine to set aside an emergency fund, to build up a savings fund, to begin to pay off your college loans, and to be ready to do the research required to get the best price on your brand new TV or your brand new car.

Live like you are college student – get the most from what you need to buy and learn to go without for awhile. No one ever died because of the lack of a plasma TV. You won’t either.

This entry was posted on Tuesday, September 23rd, 2008 at 10:00 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.