I once was a college senior.
It was mid-April and I was getting ready to graduate in late May. The thought of moving all my stuff to my first apartment overwhelmed me. What would I keep? What would I throw away? I wish I could snap my fingers and my things would magically pack themselves up and get to my place (which I didn’t have yet), and I could show up with all new stuff.
To top things off, I did not plan to move into to my new apartment until July. I needed to pack to move my things to my parents’ house or in storage for almost two months, and then move them over to the apartment. Ugh. I needed to plan ahead so that I wasn’t going to spend money that I didn’t have or run up my credit card for this outsized expense.
At the time, there was no one beating a drum telling me to get my finances in order. Big mistake! Looking back, I could have been more prepared. I want to share three strategies that would have helped me embrace the excitement of finally leaving school and get my money in order for the next season in my life.
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Pull your credit report. Understanding credit as a young adult is important. In order to rent an apartment, a landlord will want to evaluate your credit. They will want to know if you’ve been late paying bills or if your debt levels are too high to afford the apartment. Your credit report will make them feel more — or less — comfortable with leasing the apartment to you. Remember, there is a chance that you’ll be competing to get the apartment with other renters and the better your credit looks relative to others, you will be in a better position to secure the apartment.
If you pull your credit report several months before you have to look for an apartment, you’ll be ahead of the game in case you need to defend any issues or clean it up before your landlord looks at it. A free resource to pull your credit report is AnnualCreditReport.com, which allows you to get your credit report from each of the three major credit bureaus once per year. And you can also monitor your credit score for free once per month using Credit.com’s free Credit Report Card.
Get a deposit together. In my preliminary search for an apartment, it was apparent that I would need at least the first month’s security deposit. I saw a few listings that required both first month’s and last month’s security deposit. Because I couldn’t afford to pay a lot of money upfront, I made a decision to not rent any apartment that asked for first and last month’s rent as a security deposit. I did the quick math and I was prepared to pay $1,000 for rent, which meant that I had to have $2,000 to fork over by the time I moved in.
Whatever you will be doing post-graduation, you’ll need some cash to get you off to a good start. I thought about asking my parents for a small loan to float me, but I didn’t want to bother them because they already spent four years paying tuition and loaning me money whenever I fell short.
If you find yourself in a similar situation, try to put some money aside from a part-time job while you’re still in school or look for a part-time job when you graduate. Also, some employers offer a sign-on bonus or will pay for partial moving expenses. Make sure you ask.
[Credit Score Tool: Get your free credit score and report card from Credit.com]
Get some trusted help. There are thousands of other college seniors getting ready to graduate, so do not think that you’re alone. There are a number of free personal finance resources online that can help you transition into your new life, set a budget and financial goals, and get good money advice. Your 20s is a defining decade, and getting help from resources that are targeted toward you will help set you up for success. Finally, it can also be very helpful if you can partner up with a trusted friend to help you work on your goals, someone who can hold you accountable to making sure you get your money in order before you leave for school.
Image: Wavebreak Media