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GREady: Get Ready for Graduate School

Do you want to attend graduate school? If the answer is yes, shift the gear in drive. This blog will help you 1) stay informed about graduate programs, 2) decide on graduate schools, 3) apply for graduate schools (including the GRE and personal statements), 4) prepare for interviews, 5) find funding and lots more. Although this site cannot guarantee a masters or doctoral position, it does promise that you will be a very competitive candidate for your desired program!

Thursday, June 22, 2006

10 Money Shocks for College Graduates


Pat Curry from Bankrate.com advises all recent college graduates to be cognizant of the top 10 money shocks. Despite what most college students believe, Curry states that “College is not the real world [but]…the final playpen.” The 10 money shocks facing graduates largely concern bills, insurance, credit and believe it or not retirement. Hidden costs that may impact your future are:

1) Gross v. Net Income. Curry writes that most college graduates plan on spending their gross income and neglect to pay attention to their net income. Paychecks are less than what college graduates expect due to deductions for benefits, payroll taxes and income taxes. Curry advises the recent college graduates need to live off of their net income and not their gross salary. To check your net income, go to PaycheckCity.com to use its net pay calculator.

2) Bills. College graduates living in the dormitories until now usually do not have to pay for their own autoinsurance, internet access, cable bill, groceries, utility bills, cable bill and car maintenance. Curry writes that college grads need to keep rent and furnishing in mind also. In order to pay off the above bills, college grads might want to consider taking public transportation instead of buying that hot new car. Curry suggests that graduates, who move to larger cities, contact the alumni chapter to ask them about the typical cost of living.

3) The First Tax Return. Before taking all of your tax information to H&R block, be sure to think about possible tax deductions i.e. business travel and business car use.
4) Car Insurance. This is a biggie. The insurance cost increases in bigger cities. Also, budget in gap insurance if necessary.

5) Health Insurance. College graduates are usually not covered under their parents’ health insurance after the age of 23. Be sure to ask future employers if health insurance is offered and when. Students in graduate school can be offered up to 90% coverage under the university’s health insurance.

6) Other Insurance Needs. Factor in renter’s insurance which will cover personal belongings and liability. Disability insurance should also be considered. Disability insurance is more affordable at young ages.

7) Bad Credit Decisions Made in College. Credit scores follow you for seven years. College graduates typically have $3, 262 in credit card debt and loans between $20,000-31,700.

8) Credit Isn’t Free. Remember the convenience of credit cards come with a price—interest rates and harsh late fees.

9) Student Loans Don’t Go Away. 6 months after graduation you are expected to start paying on all those student loans. Bankruptcy is not an option as student loans are not forgiven.

10) Saving For Retirement. Starting with your first paycheck or stipend (graduate school), you need to put some money aside for a nest egg. Long-term money growth is the key so the earlier the better. Think about placing your money in a savings account, 401K plan, or mutual funds.

To read more about Pat Curry’s article, click on “Top 10 Shocks for College Grads.”

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