 If you clicked to view this article, then chances are that you are standing in the very same terrifying, deer-in-headlights place in life as I am: you’re about to graduate and you have no idea what you are doing. I have wondered every day for the past couple of months whether I’ll sink or swim, and I have done everything I could think of to prepare myself for the real world. Surprisingly, one of my greatest challenges thus far has been to establish a comprehensive list of bills I will be paying for on my own when I step outside of the warm comfort of my parents’ nest. There are obvious expenses like rent and groceries, but what exactly do we need to take responsibility for when we graduate, and how do estimate those costs?
Savings: Pay yourself before you pay anyone else. That’s my dad’s motto. He taught me from an early age that savings can be a key player in your success or demise as a financially independent person. Most people elect to save 10 percent of their gross pay, but if you’re more financially stable and can afford to do so, it might be in your best interest to save a higher percentage of your paychecks. You never know when Fido will decide to eat half the contents of your sock drawer and need an impromptu vet visit!Â
Rent: Put a roof over your head. As a general rule, it is advised that you spend about 30 percent of your gross monthly income on rent (or your mortgage… if you’re cool enough to own a home this soon out of college, mad props, and also, is your company hiring?). Those of you who plan to spend less time at home might opt to spend closer to 20 percent, while homebodies who value a nice home may splurge and spend as much as 40 percent of their income on rent. You can find a nifty rent calculator here.
Electricity: Keep your lights on. Unless you really dig candlelight, your electric bill should be high on your list of priorities. Estimating your monthly average for this bill can be tricky, because it varies depending on whether you have roommates or live alone, and also depending on how conservative you are. If you have roommates, you will probably have a smaller bill to pay, and if you are conservative, you will also probably have a smaller bill to pay. The only way I can help in this department is to offer myself as an example: I live alone. I try to only have one or two lights on at a time, after it gets dark. I turn all of my lights off behind me and always turn everything off before I leave my apartment. When it’s toe-numbingly cold in the winter and I absolutely cannot warm up on my own, I will turn my heater on for a few hours (this happens a few times a month, from November to March). In the summer, my electric bill averages about $30 per month. In the winter, it averages around $60 per month. The highest EWEB bill I ever had was in December when I had my heater running almost every single day for that entire month – it cost  me $100!
Cable/Internet: Entertain yourself. If you are always “plugged in” like me, you probably view internet as a necessity just like any other. In that case, prepare to pay a monthly fee to your local Comcast company or other internet and cable provider. Internet and cable packages range anywhere from $30 per month to upwards of $100 per month based on your needs. Some of you might opt for internet only, while others will be willing to pay more for access to popular cable channels.
Phone: Can you hear me now? …How about now? You’ll also need to take over your phone bill when you graduate. Smartphones are more expensive than others. For one person (i.e., without a family plan), the average phone bill for a Smartphone is between $100-150. You can estimate your own bill by researching the cost of your current phone plan (or by asking your parents!).
Groceries: Put meat on your bones. Everybody is different when it comes to the grocery department; I personally spend about $200 per month on groceries which includes food and toiletries, but I also find that I waste more food than I’d like to. By now, you should have a pretty good idea of how much you spend on your own groceries, so you should figure food into your budget and/or adjust accordingly.
Car Payment: Get yourself some wheels. If you don’t already have a car, that is! If you have a car that you plan to keep after graduation, you can factor your monthly car payment into the equation. If you the car belongs to your parents and you don’t know what your payment will be, you can use this calculator. If you need to buy yourself a car, use this calculator to determine what you can afford to spend on a car based on your estimated monthly income. TIP: Don’t forget to also add your expected monthly gas expenditures to this number!
Auto Insurance: Protect yourself and your vehicle. Car insurance is just as important as your car payment! Visit Geico to get a monthly car insurance quote based on your demographic, your driving history, and the car you own (or expect to own).
Student Debt Repayment: Start chipping away at your loans. Thankfully, we are afforded a six-month grace period after graduation before we are required to begin paying off our student loans. It’s up to you whether you start paying your loans back right away or after the grace period, but in my opinion, sooner is better. Again, this dollar amount varies from person to person depending on the loans that were taken out, but this handy loan repayment calculator will help you determine how much you can expect to pay back each month.
If you haven’t landed a post-grad position yet, I suggest you begin building a “mock budget” to give yourself an idea of what kind of a minimum salary or hourly wage that you are willing to work for. This way, you can evaluate potential job offers with a more firm understanding of what you’re looking for. For those of you who have already signed a contract and are eagerly awaiting the start of your career in June, I both applaud and envy you!Â