Help, I Have No Money; Cash Management for New College Grads

By in Debt, Money Management, Personal Finance, Saving | 21 comments

“Aura would like you to know she is having a very hard time.” Tiny Furniture the movie. 

Life is particularly challenging for new college graduates. Take a few positive steps and you can make it better. By practicing how to live within your income from the beginning of your working life, you increase your chances for financial success and wealth.

The Pros & Cons of Graduating College

College Graduation ushers in a new era filled with excitement and abject terror. First, the good; you made it! Your papers and exams are over. Next, reality hits, it’s time to FACE ADULTHOOD. Yikes!

Aura, the protagonist in the classic Lena Dunham movie Tiny Furniture is smacked with this harsh reality. After a week of mind-numbing work as a “day hostess” at a dinner-only NYC restaurant, she opens her paycheck and finds a check for $176.00. Quitting the menial job is Aura’s solution. Her next coping strategy is smoking pot and promiscuity. You probably shouldn’t continue in her footsteps

New College Grad: Get Your Money Strategies Straight

Here are some solid coping strategies which improve on those of Aura. Regardless of whether you garnered a great post graduation job or not, there are some short term financial necessities:

  • Income
  • Housing
  • Debt Repayment
  • Transportation

Income First

  • If you have a job, great. If not, get a job because you need money! Try for a career job, which usually takes some time. Meanwhile do anything to pay the bills; fast food is always hiring and pays more than minimum wage.
  • After you get paid, DO NOT CASH YOUR CHECK.
  • Have your employer directly deposit it in a bank account. No matter the size of the check, you must have part of your pay directly deposited in a savings account immediately.
  • Save part of your paycheck and transfer directly into a savings account. Try The College Investor’s Burst Savings strategy.

cash management-income, expenses, debt, housing


  • Live cheaply! 
  • Fight the tendency towards extravagance and do not use a credit card. The temptation to overspend is too great.
  • I reapeat: Don’t use a credit card! (unless you are positive you will pay off the entire bill in full at the end of the month)
  • Cut back on eating at restaurants for now. Order according to price (eat cheaply). If you head out to a club, have one drink only!
  • Buy a few career clothing items, on sale. That’s it. Do you really need the latest trendy fashions right now?
  • Cell phones can break the budget. Check out cell phone offers online and consider prepaid options.
  • You have your whole life to splurge, commit now to living simply.

Debt Repayment

  • Prioritize debt repayment. It’s extremely difficult to build up savings for now and the future, if you are paying part of your earnings towards debt repayment.
  • Understand the interest rate you are paying on the debt. Credit card debt is the worst, with interest rates in the high double digits. When you carry debt, you are mortgaging your future. What does that mean? Debt is a tax on spending. The higher the interest rate on the debt, the greater the “tax” on the debt.
  • Pay off debt at all costs. Amanda, from Frugal offers some great Debt Resources


  • Consider a “low cost of living” area. Your money will go much further in Cincinnati than in New York City. Think Cleveland, Pittsburgh, Worcester, Fresno, or Tampa. Not New York, Los Angeles, Chicago, or Miami. You can always trade up to a big city after you garner some job skills and experience.
  • Stay with mom and dad for a while while you get your financial feet on the ground.
  • If you can’t live rent free with the folks, share a house or apartment, and make sure the rules are clear. That will keep the insanity to a minimum.
  • Obviously, there is more to starting out than these few suggestions. As with any life change, take things one step at a time and before you know it, your life will be moving in the direction of YOUR CHOICE.

Action Steps

  • Email this article to all college seniors you know.
  • If you are graduating, open a checking and savings account immediately. Commit to putting part of every paycheck into the savings account. This habit will serve you well. 

image credit: Photogeek 133

A version of this article was previously published (comments remain intact)

Readers, what are your recommendations for the new college graduate?


  1. These are great tips, but one thing I have to add. In regards to the “high cost of living” areas, those places usually also pay more BECAUSE of the high cost of living, so it may pay to live there, especially with roommates.

    Briana Ford

    December 22, 2010

  2. Managing student loans becomes quite an issue for new graduates. Especially if there is more than one loan. Refinance into a single monthly payment? Make minimum payments?


    December 23, 2010

    • Personally, we are keeping our loans separate so that we can put the low ones on income repayment and putting every cent towards the more expensive ones. That will cost less and we will pay them off sooner, than rolling them all into one loan.


      July 27, 2014

      • Ginger, That is a very smart and strategic repayment plan. As you’ve already figured out, the sooner you get rid of higher interest rate debt, the faster you can start building wealth for the future. Kudos!

        Barbara Friedberg

        July 29, 2014

  3. @Briana-You bring up a good point. My advice would be to make a draft budget and figure out whether the higher salary compensates for the cost of living! As in all personal finance, it is a personal trade off.
    @ Janice, You bring up an important point. I believe there are some on line calculators and government sites to help with these decisions. Of course, as with all debt, it is preferable to get it paid off as quickly as possible.


    December 23, 2010

  4. Good post! Maybe the biggest reason to go to college is college graduates have the lowest risk of being unemployed. Many colleges have a writing requirement for graduation. Perhaps, financial literacy should also be a requirement for graduation.


    December 23, 2010

  5. I will simply reiterate what you recommended and what worked out with me. Stay with your parents if possible because you will be able to save a LOT of money. I never paid for rent in my life because in 2 years of living with my parents after graduation i was able to put together a down payment for a condo!


    December 23, 2010

  6. @Krantcents-You really nailed it HERE! Crucial points! The financial literacy requirement for graduation is the most innovative idea I’ve heard in a while!
    @Beating-VERY IMPRESSIVE. You are clearly on the way to a very secure financial future!


    December 24, 2010

  7. Getting a degree that gets you into a well-paying job has a bigger impact than salary variation where you live ;). I have a friend who lives in NYC who majored in Dramatic Literature, and works at a ticketing office now. I live in Atlanta and work as an accountant. By my rent is under $400/month, and hers is probably around $1,000.


    December 24, 2010

  8. Kellen, You come out ahead on both counts; Well paying job and affordable rent! Your friend is in the unenviable position of studying in a field with a more obtuse career path.


    December 24, 2010

  9. the thing is im getting admission in newyork community college for 2011 and right now i live in texas and my parents they dont have that much money that they can give me
    and even i dont have that much money that i can buy my apartment or i can share my room give me some suggestion what to do ?

    some body help me

    December 25, 2010

  10. To Some body, I would suggest that you stay in Texas with your parents and go to community college near their home. The cost will be much lower and you will not have to borrow money. Most community colleges are very low cost.


    December 26, 2010

  11. Thanks for bringing this topic to light.

    Having a roommate after graduating will help you share the expense and hopefully allow you to save a bit more money too.


    February 24, 2011

  12. Hi Charles, I was thinking about this topic today, after a quick trip to Boston (with sky high rents). It’s worth it to have 1, 2 or more roomates if it will put you on strong financial footing!


    February 24, 2011

  13. Even while in college I had an automatic amount taken from my checking into my savings. It wasn’t a lot, and was primarily based off a portion of the work money I was making, but it got me used to saving right away.

    The Wallet Doctor

    July 27, 2014

    • Hi Wallet, I’m impressed with your early saving start. That is getting you on the right path for a lifetime of building wealth.


      July 29, 2014

  14. Buying clothes for work is a big one. When I first started out, I shopped at outlet stores and only bought a few outfits. Then as I got paid, I put aside a small amount of money for new work clothes and built up a wardrobe over time. Once I had a handful of outfits, I stopped buying new clothes. Now I only replace shirts or pants as I need them.

    Jon @ Money Smart Guides

    July 28, 2014

    • Hi Jon, It’s those early days when the expenses really hurt. The nice part about building a classic wardrobe is that the clothes can last for a long time. Also, if you’re a conscientious shopper and shop sales and outlet shops, there are amazing bargains. My husband swears by the men’s designer stores at our local outlet mall.

      Barbara Friedberg

      July 29, 2014

  15. Unfortunately for many freshman college students moving away from home is a major lifestyle change that is difficult to adjust to. Parents can do a great service to their children by teaching them financial literacy skills and encouraging them to be self-sufficient. Buying everything your children want without requiring them to be at least partially responsible for the cost sets them up for failure when they move out of the house. If they don’t understand the value of a dollar how can you expect them to behave as though they do?

    Paul @ The Frugal Toad

    July 28, 2014

    • Paul, I love this advice. You do your kids a disservice by buying them too much. We always make certain there are things our daughter wants which we don’t buy. If her desires and preferences aren’t fulfilled, she learns to earn the money to buy what she wants.

      Barbara Friedberg

      July 29, 2014

  16. Another excellent post Barbara. I remember living cheap so I could pay off my student loans while others went out to party! I am now in a much better position now. Great post, thanks for sharing.

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