If you’re lucky enough to not have had to pay bills before graduating college, you may be freaking out after graduation. While you’re stoked to finally have that absurdly expensive piece of paper that you likely haven’t finished paying for, you may be wondering what to do now that no one is planning and financing your life for you. You found a grown-up job and are looking for an apartment, but before your first bill cycle is about to end and bills need to be paid, here are the answers to a few questions you might be asking yourself:
What can I mooch?
If you’re fortunate enough to live across the street from a Starbucks or other business with free Wi-Fi, you may be able to get away with not paying for internet. If you’re like many other chord-cutting Millennials, you may already pay for Netflix, Hulu, HBO Go, Amazon Prime, or other subscription-based streaming service. If you have one of those subscriptions, you may want to consider splitting the costs with your buddies who have other subscriptions. Not only will you not have to pay for cable, but you can share access to various platforms with exclusive content. If you have a friend with an Xfinity account, they can add you as an authorized user, granting you access to the thousands of available wireless hotspots nearby.
What do I actually have to pay for?
The most common recurring expenses are rent, utilities (water, sewage, trash, gas, cable/internet, etc.), insurance (auto, renters, medical, dental, vision), and debt (credit card bills, car loan, student loans). The first thing you can do to alleviate some to the recurring stress that accompanies recurring expenses is find a place where some or all utilities are included in rent. Asking potential landlords about this can save you hundreds to thousands of dollars in the long-run.
How much should I spend on rent?
Firstly, there is no one-size-fits-all dollar amount you should spend on rent. That would be completely unrealistic because everyone does not have the same income. There is, however, a fixed percentage recommendation: barring other major recurring expenses (like student loans), you should aim to spend no more than 30 percent of your gross income (before taxes) on housing.
What’s an ideal car payment?
As with any added costs, the lower, the better. A large factor in deciding on any car loan is the interest rate. Unfortunately, interest depends on a multitude of factors from your credit score to whether or not you’ve purchased a car before. There are tons of online resources that can help you when shopping (and paying) for a car. For example, Edmunds Affordability Calculator can help you crunch the numbers before taking the plunge. Remember, your car payment is only one of the auto-related bills you’ll be paying regularly; you’ll need to factor in insurance, gas, and maintenance, too.
How much car insurance do I need?
In addition to housing, auto expenses are another major recurring expense. If you find yourself asking: “How much auto insurance do I need?” start by taking a look at your state’s minimum requirements. Each state is different from the next. While states like New Hampshire and Virginia are much more lenient with their minimum coverage requirements, states like Alaska and Maine are much stricter and have higher minimum coverage requirements. So, if you’re living in Maine, you’ll need more insurance than you would if you lived in New Hampshire.
We know that bills can be scary, so keeping the above common questions and solutions in mind can make adulthood play out a little smoother.