Conquer your student debt. Refinance now.
Here’s the good news for Class of 2017 new graduates: They are poised to earn more in their first-year job than any other graduating class. The average annual salary for a new grad this year will be almost $50,000, according to a new analysis from Korn Ferry International, an executive search firm.
Now the bad news: The same graduates will have nearly that much in student loan debt. Last year graduates held an average of $37,172 in student debt, and according to Mark Kantrowitz (the student loan expert who calculated that figure), this number will likely increase by $1,000-$2,000 for undergraduates donning a cap and gown in 2017.
While individual numbers may vary, the reality is that the first few years out of school are going to require good budgeting and money management to get out of debt (refinancing student loans can help too.) Here are some pro-tips from recent grads.
Say No to New Furniture, Yes to Roommates
Communications major McKinzie Brocail graduated from Sam Houston State University in 2014. But instead of rushing to buy anything new after she graduated, she saved on housing costs by turning to Craigslist and hand-me-downs from a friend.
It can be tempting to splurge on grown-up furniture as soon as you land your first post-grad apartment, but you might want to think again—furniture is expensive and paying to move it adds an additional cost. The average intrastate move totals more than $2,000, and moving between states can run you upwards of $4,000, according to the American Moving & Storage Association.
McKinzie says her total bill for home furnishing came to around $1,000 total for an entire apartment—and she negotiated a discount by buying a whole batch of things from one seller. “It isn’t great quality, but I consider it temporary until I move into a home,” she says.
In addition to perusing Craigslist, companies like Gone and Letgo (or other similar offerings in your area), also have furniture re-sale.
Roommates help too—sites like Craigslist, Roommates.com, PadMapper, and RoomieMatch can help you find a mate, who will not only help reduce your rent costs—but may have the added bonus of furniture too.
Another option is renting a pre-furnished apartment (which Brocail had while she was in college), assuming you don’t mind someone else’s aesthetic and that you trust yourself not to ruin what’s already there. Then there is always moving back home. After all, a full 19% of college graduates live at home.
Read more: How to Make a Budget
Seek New Horizons
While it may be easier to look for jobs near your school, don’t limit the job search to your immediate vicinity—better economic opportunity may await you if you’re willing to move to a new city.
Earnest’s analysis showed moving to a new metro area post-graduation can boost your income by a median of $23,000 for grads of top 25 schools, and $10,000 for those who attended a non-top 25 university.
Don’t let more expensive cities scare you away, as wages and upward mobility tend to be greater in places where, for example, rent is higher.
Minimize Your ‘Fixed’ Costs
Everyone has to get to work and eat, but the amount of money you invest in these so-called ‘fixed costs’ of life can vary widely and make big difference on your monthly budget.
Josh MacDonald, a senior at the University of Toronto studying computer science (who also happens to run his own software company), recommends using an app like Flipp to watch for food deals and then stocking up on non-perishables when they go on sale.
Make eating at home your default, and learn to cook a few inexpensive and easy meals and keep those ingredients on hand. (YouTube is an endless resource for how-to’s — Tasty is a favorite if you’re looking for some inspiration),
Now about that car. According to a study by AAA, owning a car costs $6,729 on average for drivers racking up 15,000 miles per year; this cost can vary by miles driven, as well as the type of car. If you’re able to go car-free, see if your job offers any commuter benefits to further cut down those costs. If you must have a car, you might consider a low-cost lease—which you can negotiate.
It’s All About the Side Gig
In addition to saving money with low-cost furnishings, recent grad McKinzie has a side gig as a freelance writer to make extra income to boost her savings.
“I consider the money I make freelancing as extra income, so saving all of it is more rewarding to me than spending it ‘just because’,” she says.
TaskRabbit can be a good option for those handy with furniture, construction, moving, administrative help, and other household tasks. The rate you’ll be able to charge will vary by task and skill level, but current Taskers report everything from $25/hour for product testing to $150/hour for carpentry. Airbnb is another option to bring in extra income and offset rent and utilities.
If you do have a car that’s not always in use, consider renting it out on a platform such as Turo or GetAround. Some car owners report earning up to $1,000 per month.
Driving for Uber or Lyft is another option. Your earnings will vary by metro area, but a national study found the average earnings across Uber’s top 20 metro areas to be $19/hour. This could be significantly greater if you live in a city like Manhattan, for example, where this average is more than $30/hour.
“My roommate and I also rented out our living room on Airbnb, I started driving for Uber, and I took on some freelance assignments to squirrel away more money to free myself from my loans,” recent graduate and Earnest client Kassondra Cloos said in a blog post about her journey out of debt.
Ask for What You’re Worth
One big mistake that many recent grads make is failing to negotiate their salary before accepting a job offer. Particularly in a competitive job market, it’s tempting to jump on the first offer you receive (even more so if it seems to be a good one), but you should always negotiate — if for no other reason, do it because those who negotiate tend to be happier with their jobs.
One study found that those who were successful in negotiating a starting salary increased their pay by about $5,000 per year. Over a career, this could total hundreds of thousands of dollars in extra wages, as your first salary sets the bar for any future pay increases.
You should negotiate even if you’re pretty sure you won’t be successful. Don’t feel bad, as a minority of people who negotiate get what they ask for, regardless of age (though younger negotiators are typically less successful than more tenured employees). Money aside, negotiating your offer is important because it sets a precedent with your new employer; It sends the signal that you value your work and that they should too. Plus, negotiating an offer is awkward, and you should take every opportunity you have to improve your bargaining skills.
Good luck grads!