You just graduated and you are incredibly excited. You have a new well paying job in hand and a summer in front of you. So what is the next step? I can't tell you how many of my friends made incredible mistakes during this period. Each one made the same mistake, counting the chickens before they hatched. Rule #1: Don't Buy Anything Expensive I know you want to, you're jumping out of your skin, and you see that big pay day coming down when you will be pulling in $1,900 every two weeks, so why not splurge. Why not go out and purchase that brand spanking new BMW, Audi, Acura, Luxury SUV, etc.? I want something to commemorate how successful I have been and a new car sure seems perfect. These emotions happen in 9 of 10 new graduates and 7 of 10 make this mistake. Why do I call it a mistake? Simple, you failed to think of the long term picture and your personal long-term goals. You now tied up $500 per month on a new car for 5 years, plus $2 grand in insurance, plus $3/gallon in fuel costs, plus regular maintenance (at $200 - $300 a pop) on a emotional purchase. You then get to your first day of work and you sign up for the 401k plan, the Health Insurance Plan, the Life Insurance Plan, the Long-Term Health Plan, the Disability Plan, etc. And figure out that you don't really make $1,900 every two weeks (its something much less). Oh and I almost forgot about the haircut you will take from federal, state, city, social security, medicare taxes. So before you know it you are really only making a bit more than $1,000 every two weeks. Ok, now subtract $500 for your new car payment and $250 for insurance and gas (forgetting about oil changes, etc.) you are now down to only $1,250 in spending money. Well that's still good money right? Well that depends. How much money are you going to start putting aside to come up with a down-payment on your future residence? Where are you going to live? If you look around you will not find anything decent for under $1,000 per month and you only have $1,250 (start thinking about room-mates). Most solve this problem by living with the parents for a couple of years paying them say $200 per month (ok now your down to $1,050). But how long can you stand living at home once you got used to living on your own at school. Not long, trust me. So now the reality sets in and you start complaining that you don't make enough money. You convince yourself of this. When the reality is you made a bad financial decision that, in the real world, you know have to live with. That is not your employers fault. Realty is you make $50,000 per year, just out of college -- when you know absolutely nothing, which by the way is much more than the average salary of most on Rule #2 Don't get hitched (this is very expensive see Rule #1) Ok, you are going to disagree with me here, especially if you are in love. Love is a wonderful emotion, marriage is a terrible knee jerk reaction. Let me explain. First of all I am married and I love every second of it. However, I got married 6 years after I started working, we dated for 8+ years. When you first get out of college you think wow we both make enough money to get married and start a family, etc. Etc. Etc. No you don't! So combined you make $100 thousand per year (assuming you both landing awesome jobs). You quickly find out that $100 thousand in the tri-state area doesn't buy you too much. Why? Because you still want to go out and visit the fancy restaurants, experience Broadway, get familiar with the night life, go to ball games, etc. However, unless you live in your parents basement -- which is a huge bummer -- when you are married, you are stuck, in a $1,850 per month 3 bed room apartment that is just big enough to fit her stuff and all those wedding gifts, perhaps can squeeze in a small pet or a child. Let's do the math;
There are about 15 different cost categories I didn't include in the above that will now drive you into credit card debt. Further, the above doesn't include any costs to care for the pet (which are incredibly expensive) and forget about child care costs. You should see what day care centers are charging these days. So what is the result? Move in with the Parents (urgh!!). After you can't stand that anymore, you start to fight. Hmm, the #1 reason for divorces in the This is not to say I don't have friends that have found a way to make this work, there are definitely many examples. However, there are almost always special circumstances such as; · Mommy and Daddy are loaded and will pay you to stay out of their house · You get a bucket full of cash as a wedding gift · You're the type of people that are satisfied not having the best of everything and don't like to go out too much So here is my advice, date for a long time, see if you guys really like each other. Even live together if you want. Then when you have enough saved to put a down payment on a house, pay for the honeymoon, and split the bill for the wedding -- then get married. It makes all the difference in the world. And if you explain to your spouse to be the reason you don't want to rush is to ensure that, when you do get married, you have an emotionally and financially mature foundation to build a life upon-- they might just understand. It worked for me, the key is to make sure the parents also buy the sales pitch. Rule #3- Be Your Own Person Don't get caught up in yourself. Don't expect anything. Nothing in life is handed to you. You only deserve what you earn, and that's only if you fight for it. Too many people start there new jobs expecting the opportunities to be handed to them. They expect that each task they are given will be up to their standard of education. The reality is that in the first year, the expectation is that you know nothing and need to be taught everything. Go with that expectation, it is absolutely the best time to learn and grow professionally. Also assume nothing about the people you work with and for, build your own relationships and networks, and don't let the gossip mill guide your thoughts on particular people -- it will limit the opportunities available to you. Make your own path and be satisfied with yourself. If you are comparing yourself to someone else you will never enjoy the process. As you know, life is a process and if you don't enjoy the process then what is the point. It does not matter what other people are doing, it is what you are doing and accomplishing that should guide your perceptions and drive your ambitions. Too many times I have seen people actually quit or do something foolish because it was their perception that "everyone thinks this place sucks," or "so and so is getting more attention than I am getting." If you are guided by the group mentality of "everyone" and "why not me" then you sucking yourself into a place where you will never be happy, in whatever you do. Reality Check -- every job sucks -- if you consider it a job. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sunday, April 09, 2006
The Day After Graduation
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment