How Recent College Graduates Can Avoid Non-Academic Debt

1. Establish a budget.

It's difficult to control spending if you don't know where your money goes. Create a detailed monthly budget that includes all of your income and expenses. If your expenses are greater than your income, identify places where you can trim spending. Most importantly, stick to your budget to avoid taking on debt.

2. Manage student aid effectively.

Creating a monthly budget can be tricky if you cover living expenses with student aid. You may get a large disbursement early in the term that has to last for months. Figure out how much of the aid you can spend each month and use that 'income' figure in your budget. Avoid spending over that amount.

3. Avoid impulse buys.

Impulse buying is one of the biggest budget busters, particularly when items are expensive. If you have a high-end item on your wish list, don't buy it until you can afford it. Perhaps you can cut something from your monthly budget to save the money it will take to buy the item you'd like to splurge on.

4. Build your savings.

A better place to put any extra money you have at the end of the month might be your savings account. Having some extra money on hand can be very helpful if there's an emergency. If you don't have any savings, it may be necessary to use a credit card or another form of debt.

5. Plan for big-ticket items.

Regularly putting money into a savings account can also help you cover any upcoming large expenses. For instance, if you know you have to buy a new computer before the next academic year, make a plan to regularly put a certain amount of money into your account so that you have the full expense covered when it's due.

6. Use credit cards wisely.

It isn't necessarily a bad thing to have a credit card. In fact, regularly using a card to make small purchases can be an effective way to build credit - provided you pay off your balance at the end of each month. If you already have a lot of credit card debt, you should put any extra money you have toward paying it off quickly.

7. Pay with cash.

Some people simply aren't capable of using credit cards in a responsible way. If you're someone who can't stop misusing plastic, stick with paying in cash. Using 'real' money provides you with a better sense of how much you're actually spending. Use discipline to avoid overspending in any area.

8. Make sure you have insurance.

Not having appropriate insurance can be very costly. For example, if you don't have health insurance, a medical episode could force you to be responsible for tens of thousands of dollars in hospital bills. People with cars, homes and other assets that require insurance should also be sure to have appropriate coverage.

9. Pay bills on time.

Get into the habit of paying every bill on time. When you do, you'll avoid late fees and other charges that can cut into your budget. Not only that - paying bills in a timely fashion helps your credit score. People who have good credit are often eligible for low-interest offers and other financial benefits that can yield savings.

10. Consult a financial adviser.

You don't need a million dollar stock portfolio to utilize the services of a financial planner. These professionals can advise you on wise financial moves that account for your student status. And if you're proactively working to accumulate wealth now, you're less likely to one day find yourself in debt.

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