Graduating from college or university is cause for a major celebration. All of that hard work and studying has paid off and you’re ready to start focusing on your new career. However, one thing you really need to prepare for is the change in budget.
Now that you have graduated, you’re going to notice some major changes in your financial situation. So, what budgeting changes do you need to account for?
The cost of rent
While you did have to pay some amount towards your uni accommodation, now you’ll have two choices – either move back home with your parents or rent a property. Many graduates do choose to move back home in order to save for their own place. However, if you’d prefer to maintain your independence, renting is the best option.
The cost of rent is currently at an all-time high, so you’ll need to do your research to determine which areas are cheaper. You could also rent a room in a shared house, rather than an entire property to save money.
Your income should go up
If you were already working when you were studying at uni, your income should now increase. As a general rule, graduate incomes typically start around £20,000. However, again it’s worth researching to see what the average graduate salary is in your chosen profession and area.
Don’t forget to take off the tax too. Many jobs advertising their annual salary don’t account for the tax that is taken off. So, this is something to think about when applying for new positions.
Monthly costs to consider
As well as your rent, there are other monthly costs you’ll need to consider. You’ll already likely have a student loan to pay off through a company such as Smart Pig, so this needs to be factored into your budget. Then there’s the travel costs of getting to work, money for groceries, your mobile phone and money for clothing.
You’ll also need to pay bills including water, gas and electric. It all adds up so you will need to do some pretty clever budgeting until you get adjusted to your new circumstances.
Overall, your budget does change significantly once you become a graduate. It’s worth planning well in advance before you actually do graduate in order to ensure the transition is as smooth as possible. The above are just some of the main things to factor in to your new budget.