Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, May 28, 1990 TAG: 9005260013
SECTION: BUSINESS PAGE: A7 EDITION: HOLIDAY
SOURCE: MAG POFF BUSINESS WRITER
DATELINE: LENGTH: Medium
The harsh reality of that world, however, is that moving into it costs money. A lot of money.
Virginia Gayle, director of Consumer Credit Counseling in Roanoke, said she sees quite a few recent graduates who are already in over their heads financially.
These students spend some uncompensated time at first searching for "the perfect job paying what they think they deserve."
Most often, Gayle pointed out, getting to a new job requires purchase of a car. That means a big slice out of a payroll check for the monthly payments.
Becoming employed means replacing a school wardrobe with career clothing.
Usually those who embark on a new job also want their very own place to live.
But if the diploma is from college, student loan payments are looming six months hence.
Gayle said graduates who fail to plan their expenses will allocate all their money before the loans come due. They will have nothing left over from their pay to meet the loan payments.
Gayle urged people who are starting out in the business world to draw up a realistic budget.
Remember that a car carries more than its own payments. You must budget for insurance as well.
If your job is niggardly on benefits, you must plan for health and disability insurance as well.
Be careful about buying clothes too. Start by investing in a few interchangeable pieces rather than an entire wardrobe at once.
"Don't make any major purchases," Gayle said. "Keep the student loans in mind."
If it's at all possible, Gayle advised, recent graduates should live in their parents' home for at least six months before renting their own apartment.
You need at least six months to acclimate to the job and the expenses of working and commuting, Gayle said. And parents are usually amenable to this trial-run period.
Use the budget to determine the type of accommodations you can afford before you begin searching for an apartment.
Remember the up-front costs of renting an apartment. You must post a security deposit along with the first month's rent.
You'll also have advance expenses for connecting utilities and installing a telephone. And a phone is a booby-trap for people who fail to control their calling habits.
An apartment also means furniture and kitchen utensils - unless you can raid the family home for surplus items.
Gayle said graduates often owe more than one student loan, each with its own repayment schedule.
Determine the amount of each monthly payment as soon as possible after graduation, she said. You need to understand exactly what you owe before you can outline your initial budget.
It's important to make full payments on student loans on or before the due date, Gayle said.
The interest rate is very low, she explained, but the interest is compounded on a daily basis.
If you fail to make student loan payments on time, Gayle said, "the interest will eat you up."
by CNB