With graduation season upon us, lots of young folks are about to enter the real world, a world where they have to pay for their own food, gas and clothes.
'They look forward to being out on their own because they think they'll have more independence,' says Judith Bradford of Summerville. 'But that brings with it more responsibility, too.'
Bradford is the mother of two college graduates and a college student.
'My oldest child said she would never live at home,' Bradford says. 'She's been here nearly two years now because she has so much debt, she can't afford to move out. My son has less debt but makes less money. He lives in an apartment with three other guys and still has a tough time making ends meet.'
Even though the economy is recovering, the competition for jobs is still tough.
'If you can find a job, it's probably not going to be in your major,' says Michael Preston, who graduated from the University of South Carolina this weekend. 'I have had no luck at all and will probably wind up looking for a job in retail just because I need something.'
Used to living in dorms and being on meal plans, recent college grads often have a difficult time living within their means.
Thanks to student loans and credit cards, many are already in the hole by the time they receive their diplomas. About 1.5 million college graduates in the United States leave school each year in debt, according to learnvest.com, a women's personal finance website.
Many recent graduates average 10 credit cards and are used to charging everything, including beer, books and pizzas. Before they realize it, they have a hard time making the minimum payment, the website says.
'Trying to crawl your way out of debt can be difficult,' says Carla Smith, a financial planner in Dorchester. 'This is exactly how so many parents wind up with college grads living at home. They are already struggling financially when they graduate because they have credit debt and student loans.'
She says the first step, regardless of a student's situation, is to make a budget.
'No matter how much you have coming in, you still need to be aware of that number, and you need to know what your expenses are,' she says.
When creating a budget, young adults may consider the cost of rent, but not think about things such as electricity, health insurance or auto insurance. They may not factor in their gym membership or entertainment.
'It all feels overwhelming,' says Jessica Allen of North Charleston. 'I wrote a budget, and I should have money left over every month, but I never do. I don't know how I am supposed to pay my student loan, credit card bills, rent and other bills, and still be able to afford to live.'
New grads may need to compromise their expectations.
'Everybody would like a huge apartment with lots of amenities,' says Bradford. 'They want to fill it with new furniture, a flat-screen TV and all the latest gadgets or they want a name-brand wardrobe. But they need to consider the bottom line and they may have to settle for less.'
Preston says that can be difficult. 'I'm not saying I have to have everything right now, but there is a certain expectation after you spend so much time working on a degree,' he says. 'Instead, I'm in a situation where I can't even afford to go out with friends sometimes.'
Smith says that even the lucky few who manage to find a dream job can find themselves in trouble. 'College students are typically broke, so they get used to that,' she says. 'Then they get a good job and have money rolling in, but the bad news is that they often don't know where to start to create a budget.
'They can still wind up squandering their money and getting in debt. The bottom line is this, if you don't make it, don't spend it. Learn now to live within your means.'
--Regardless of your situation after graduation, mark your calendar with important dates that impact your finances.
--Figure out your health care plan. Know when your health care expires and be sure to take the appropriate steps to find a new insurance plan.
--Create a budget. Manage your spending by creating and sticking to a detailed budget.
--Understand your salary. Not all of your earnings will go directly into your wallet. Some will go to taxes, some should go directly into your savings account and some should be put into a retirement account.
--Understand and manage your employee benefits. Many firms will offer a variety of benefits and it is your responsibility to read through and select the insurance plans that best work for you.
--Fill out a W-4 Form. Filling out a W-4 is one of the first things you do when you start a new job and you will use your W-4 Form at the end of the tax year to figure the right amount of federal income tax to have withheld from your paycheck.
--Pay your bills on time. It is imperative that you pay your bills on time in order to maintain a good credit score. Sign up to receive your statements via e-mail.
--Check your credit score.
--Set up an emergency fund. You should aim to save enough money to cover six to nine months of your living costs, including rent.
--Start saving. You should have a retirement account, either a 401(k) or an IRA.
Grads by the numbers
--College seniors graduate with an average of $4,138 in credit card debt, up 44 percent from 2004.
--On average, the majority of people between the ages of 18 to 24 spend nearly 30 percent of their monthly income just on debt repayment. (A recommended amount is 10 percent of net income.)
--The number of 18- to 24-year-olds declaring bankruptcy has increased 96 percent in 10 years.
--More than 80 percent of graduating college seniors have credit card debt before they even have a job.
--19 percent of the people who filed for bankruptcy last year were college students.
--The total amount of student debt owed today, including both federal and private loans, stands at $763.4 billion.