Confessions of a $635.79 Credit Card Bill

Farnoosh TorabiWhen personal finance author Farnoosh Torabi recently spoke with students at Penn State, her alma mater, a young woman asked for her best advice on the elephant in the room -- student loans.

"I said, 'Well let me ask you a question,'" Torabi later recounted. "'Do you know how much you're going to owe every month when the time comes to repay the loan?' And she said, 'I have no idea.'"

I can relate. Having long considered myself a penny-pincher, I was stunned to recently receive a credit card bill for a whopping $635.79 – an all-time record for me. Trembling as I wrote that check, I kept asking myself: Why did this happen? How did I spend so much? What do I do next? I, too, had no idea.

And that's why I'm writing this series on the road to financial independence in the "real world" after college. Since we all get by with a little help from our friends, send me your burning personal finance questions and I'll line up people way smarter than me to help us answer that big post-college question: "What now?"

Thankfully, Torabi graciously agreed to start us off, sharing what we need to include in our "action plan" for mapping out personal finances after graduation:
  • First, she says, find a source of income. Easier said than done, right? Well, remember that, as Torabi told me, "for a lot of college students, that income may not come from a typical 9-to-5 desk job." String together multiple jobs, or think like an entrepreneur to create your own opportunity that cashes in on your skills.
  • Next, Torabi says, set goals. Think seriously about where you want to be in five years or more and prepare for how that will affect your personal finances, whether that's going back to school, starting your own business or getting married. She's right -- my own wedding is nine months away, and it's crunch time to save the $1,000 I promised to contribute.
  • Get health insurance, even if you feel invincible. Unexpected medical bills "could ruin you" if you're an uninsured and earning a small salary, Torabi says. Check out your options -- young adults may be able to stay on their parents' plans until age 26, or find insurance through a job, a professional organization or a union.
  • Making your monthly student loan payments on time is critical, Torabi told me. Know what you owe, read the fine print and stay in touch with your lenders so that you can pre-emptively make adjustments or modify your loans if you anticipate not being able to make payments.
  • Finally, surround yourself with a supportive community, Torabi says. Don't be afraid to talk about money with family members or friends you trust and let them help you stay upbeat and grounded. And now that we're in this together, dear readers, know that I've got your back too.
"At the end of the day, no one will care more about your money than you," she said. "Embrace that philosophy, and with that you're going to have an easier time making these hard decisions."

Next time, personal finance expert Manisha Thakor shows us how to build a budget and I redeem myself from that nasty credit card bill. For more on setting your financial goals, Farnoosh Torabi's new book Psych Yourself Rich (my current nightstand read) has some great tips. Remember to get cracking on your own action plan -- I sure will -- and I'll see you next time.

LeeAnn Maton, 23, graduated from Loyola University Chicago in 2010 and works as a reporter for the Chicago Sun-Times Media Wire. She is writing a series for Money College on financial life after college.
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