Life After College: Preparing Your Finances for the Real World

Life After College

This is definitely not me.

College is hard work. But between studying and attending classes, you probably find time for fun and friends. This is the time for self-discovery, and if your parents offer financial support, college might be your four-year vacation before adulthood.

But like most good things in life, the party eventually ends. And while you may look forward to walking across that stage and grabbing your diploma, you might question whether you’re ready for the real world.

Managing your personal finances while in school can prepare you for life outside college. Sadly, some college students rely entirely on their parents for financial support. And after graduation, they don’t know the first thing about credit or managing money. 

To make the transition from college life to real life easier, take control of your finances while in school.

1. Get a job. Not to say you have to work a 40-hour work week. However, a part-time job a few days each week can provide real work experience. You’ll learn how to deal with coworkers and bosses, plus the money from your job can help cover some of your expenses, such as food and transportation.

2. Open a savings account. Don’t blow your entire paycheck on entertainment and clothes. It’s okay to treat yourself from time to time, of course. But it’s important that you make saving a priority. The more cash you save while in school, the easier it is to buy a house or create a nest egg after graduation. Check around and compare bank savings account rates, and consider high yield savings accounts, which offer better rates than a traditional savings account.

3. Apply for a credit card. You may feel that it’s impossible to get a credit card with part-time income. However, several banks offer college student credit cards. Eligibility requirements vary. And while some banks may require a cosigner, others will approve you without a cosigner as long as you’re employed and have a bank account.  Getting a credit card early helps you establish a credit history. Pay your bill on time each month and don’t max out your account. Aim to pay off your balance in full each month. Stick with these responsible habits and you’ll develop a strong credit rating in no time.

4. Learn how to budget. Even if you don’t have a lot of bills, a budget makes financial sense. Plus, if you develop your budgeting skills now, it’ll be easier to create a budget after graduation. A budget is comparable to a spending plan, in which you decide how much to spend in different areas each month.

5. Make student loan payments while in school. Federal student loans don’t require repayment until after graduation, however, interest does incur while in school. To reduce how much you’ll owe after graduation, take some of your work income and make periodic interest payments while in school.

Don’t wait until you’re about to graduate to get serious about your money. If you have few bills and limited responsibilities while in school, this is the perfect time to get your money on track.

How did you adjust to life after college?


About Holly

Holly Johnson is a wife, mother of two, and frugal lifestyle enthusiast. She is the co-founder of Club Thrifty and a staff writer at Get Rich Slowly, Frugal Travel Guy, and U.S. News and World Report's "My Money Blog." Holly has been featured in the Wall Street Journal, Kiplinger Personal Finance, Fox Business, and Daily Finance.


  1. Great tips! It as amazing to me to discover how many of peers in school did not know how to manage money, did not have a savings account, or a credit card. I didn’t realize people didn’t have those things for years before entering college. I think many students have a rude wake up call upon graduation.
    Blair@LifeDollarsandSense recently posted..Repeat Meals, A Way to Save At the OfficeMy Profile

  2. I think the most helpful thing is definitely getting a part-time job. It’s something I didn’t do till the end of my college years but wish I had done sooner. It helps you learn how to balance responsibilities, handle a paycheck and develops some amount of self-sufficiency. Plus, that beer money has to come from somewhere right?
    Matt Becker recently posted..We’re Pregnant! Again! Now What?My Profile

  3. Great tips, Holly! I actually started the Monday after graduation. So I graduated on a Friday and was in the office full-time starting that Monday. Working part-time my last semester made the transition very easy – I was working 24 hours at the office every week already. I was very fortunate to be able to do that.
    DC @ Young Adult Money recently posted..Friday Giveaway Roundup – 111 GiveawaysMy Profile

  4. For me, real life started the day after my high school graduation and I had to find a place to live! :)
    Michelle recently posted..How I Stay Motivated When Being FrugalMy Profile

  5. Making student loans while in college is a great idea. If you can’t do that, then definitely start immediately after. The first bill may not come for 6th months, but compounding interest can do a lot of damage in that time.
    Michael @ The Student Loan Sherpa recently posted..Meet Colleen: Learn the Cost of 7.25% Interest and Putting Children FirstMy Profile

  6. I wish I would have started making payments while in college as well as started saving for my 401k since I worked the whole time. Sadly I think I applied for a credit card my second week of college when one of those tshirt people got me to apply for a free tee.
    Thomas recently posted..Blogging to Make It More Personal – Maybe Maybe NotMy Profile

  7. I’ve never had a federal loan, so I didn’t know that interest incurred while in school, I thought it only begun after! That’s good to know. It might be different in Canada though.
    Daisy @ Prairie Eco Thrifter recently posted..Wave Goodbye to Expensive Entertainment and Head Over to the Beach for Cheap FunMy Profile

  8. Even better than getting a job: look for internships in your field. My friends who had internships during college often were offered positions with those companies. The ones who didn’t, still had better interview skills because they “got it” when it came to what the new boss might be looking for in an employee.
    AverageJoe recently posted..The Stack – James Gandolfini EditionMy Profile

  9. Great tips Holly! I did a few of these myself while in school…now if I could only go back and start repaying those loans while in school. ;)
    John S @ Frugal Rules recently posted..Frugal Friday: Would You Like to be Immortal?My Profile

    • We did okay in that respect because we paid on them as soon as humanly possible. Still, I wish we would’ve paid them off sooner.

  10. I tried to continue living like I did in college and not inflate my spending too much. It was a great time to save money because I didn’t really have a lot of life expenses to worry about like I do now.
    Tina @My Shiny Pennies recently posted..Choosing Quality Over PriceMy Profile

  11. I am so happy I didn’t resort to credit in college. Many of my classmates are still paying off their loans, and since tuition was really cheap, it was basically to pay for beers and cars. College is the perfect time to learn about finances with some boundaries until real adult life.
    pauline recently posted..Friday recap, discipline and summer!My Profile

  12. I agree with Tina. I know a lot of college grads or soon to be college grads who started spending more because they either had a job lined up or figured they would be making decent amount of money. They started spending before they had the money. And they spent more than they could afford since they didn’t consider the added expenses they would have.
    Andrew@LivingRichCheaply recently posted..No Haggle Car BuyingMy Profile

  13. I worked part-time throughout college, had credit cards too but the biggest mistake was not making payments on the interest while I was in school. $17,000 of unpaid interest (suckered into private loans first) was capitalized and I’ll essentially be paying interest on interest for a couple more years before I get my balances down to what I originally borrowed!
    debtperception recently posted..Health UpdateMy Profile

  14. I ended up doing all these things before leaving college. I was responsible for the majority of my own savings and bills as soon as I graduated high school (with the exception of a couple, the rest kicked in on my 21st birthday). I never finished school so I can’t say how life is after graduation, but it is amazing how put together my life seems now despite not having the “big kid job” everyone imagines after getting a diploma. Figuring out how to handle money was the most important thing I ever learned, and I’m amazed how many of my friends who are still in school have no idea about personal finance.
    Kyle @ Debt Free Diaries recently posted..The Best Time to Make Mistakes – And What to Do When You Make OneMy Profile

  15. I agree about getting a part-time job, especially if it helps you get free room and meals (i.e., resident assistant). That’s a great idea about paying loans off while still at school, I wish I had done that!
    anna recently posted..My Journaling/Tracking HabitsMy Profile

  16. My financial habits were set before college. I earned money during the summers that I used for my spending money in college. It was some of the best budgeting I ever did. These skills carried into my professional and personal life.
    krantcents recently posted..When to start saving for retirementMy Profile

  17. Having a credit card early, while possibly dangerous, can be helpful to build credit score, as you point out.

  18. I worked all through high school and college and I’m really thankful I did. I think it would have been a really hard transition to go from college to the working world if I hadn’t. Knowing how to deal with people and office politics and priceless, especially for new grads. Get those awkward moments out of the way before you get the first “real” job.
    KK@Student Debt Survivor recently posted..Neighbors Selling Their Condo – Are We Next?My Profile

  19. Nick @ says:

    I think these are mostly great tips. ;) The only one I can’t quite get on board with is the credit card thing. I actually think college is probably the worst time to try to learn how to use a credit card. The temptations to splurge are just too high, and the accountability is usually much too low. I still think this is a great post though. :)
    Nick @ recently posted..Frugal Friday Find – Amazon StudentMy Profile

  20. Good tips. My last term of college was only part time because I didn’t need a full term of credits. So I was able to use that time to ramp up to working full time and get my budget in order. :) I’m trying to help my sister do the same actually – she’ll be graduating soon.
    CF recently posted..What makes a great neighbourhoodMy Profile

  21. I did not adjust well at all and tried to become a Jones. Follow these rules and be your own person. No need to have everything right after you get your first job.
    Kim@Eyesonthedollar recently posted..Eyes on the Dollar 20/20 Roundup #41: San Diego Here We ComeMy Profile

  22. I hear ya. Greg and I didn’t make the best decisions when we were young either!

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