How much money do you plan on earning after you’re done school? Once you figure out what to do after college, do you know how much income you’ll have coming in?

I wanted to look at the average starting salary after college to see what most paths would pay for recent graduates. Why did I want to do this research on the expected salary for college graduates?

I read a study on MoneyVille (power by the Toronto Star) that noted that 3,000 college students were surveyed and some interesting results regarding finances post-college were found. The majority of the students thought that they would be earning $90,000/year by the age of 30 and out of student loan debt within five years of graduating from college.

Are these expectations for the average starting salary accurate? Is it possible to get out of student loan debt that quickly?

The article itself noted that these expectations were unrealistic. I agreed just based on being in that age group.

What’s really the expected salary for college graduates?

I went to the popular site, PayScale, to check out what the expected salary is for most college undergraduate programs.

There’s only one job that starts out at over ninety grand and that’s for Petroleum Engineers. Those that majored in Economics will bore the world at $47,300 per year. Urban Planning will land you $41,500. The Philosophers will earn $39,800. Marketers will sell us crap at $38,200. Historians will get $37,800. The Graphic Designers will draw themselves $35,600. Photographers will snap shots at $32,900.

What about student loan debt?

Statistics Canada says that that average student debt after college was at $19,500 in 2000. The most recent figure for average student loan debt was pegged at $25,250. In the US, the average amount of student debt is at $23,200 with many cases of graduates owing absurd amounts that easily surpass $50,000 in student debt.

What do all of these numbers mean? That you could easily be spending a huge chunk of your income after college to deal with your student loans. This means that you might not be able to travel the world or own all of those nice toys if you don’t figure out your finances early on.

Why’s the average starting salary so shocking?

This is why many of us get into credit card debt in our 20s. We just feel like we can easily pay it off in the future. It doesn’t seem like a big deal to us. We just envision ourselves making lots of money one day in the future. None of us plan on staying at $50,00 per year forever.

The reality about the average starting salary is that we won’t be making as much money as we would like to be. We won’t become instantly rich right in our mid-20s. It’s going to take much longer than we originally expected.

According to Generation Earn, the average person spends two-thirds of their income on the essentials (housing and food). This means that you won’t have much money for going out and the annual wardrobe upgrade.

Another truth regarding your income after you’re done with your education is that you should look into starting a business because your original salary might not be enough income for you. I outlined in the past how you can start a business with no money right now. I truthfully wish that I signed up with BlueHost much sooner and got involved in the online game earlier. You can easily make more money on the side while you grow your career.

I didn’t mean to scare you with these numbers. I just wanted to paint a realistic picture about finances after college. The good news is that you can start your own business, manage your money properly, and have an amazing life if you’re a little bit smarter than your friends.

Your credit card is likely your fastest access to credit right out of college. If you want to start building your credit or at least establish some sort of a credit history, you’re going to eventually want to get a credit card. You can easily argue the merits of a credit card and if you should even get one in the first place. However, that’s not the direction of this piece. I wanted to put together a resource for those of you that want to apply for a credit card right now.

Let’s go over what you need before you apple for a credit card. If you want a credit card right now you’re going to have to go over the following options to see what works for you. You also want to ensure that you find the right card.

Find a credit card with these features.

There are certain features that I highly suggest for your first credit card ever. What are these features?

• No annual fee. You really shouldn’t have to pay an annual fee with your first credit card. It just makes no sense to pay a fee when your first credit card won’t offer you the greatest options.
• Low interest rate. Most of us don’t care about the interest rate at first because we don’t plan on missing payments and getting into debt. Then when we start focusing on credit card debt elimination we realize that those damn high interest rates are working against us. This is why I always urge that you fight for the lowest interest rate possible.
• Relevant rewards. A rewards based credit card is great if you actually NEED the rewards. There’s no sense in applying for random store credit cards if you rarely visit the store.

It’s also important to note that if you’re a more experienced credit card user you can considered a different sort of strategy. You can obtain a points based credit credit card where you pay an annual fee and build up points towards future flights. We’ll get more advanced in the future.

Decide where you want to get the credit card from.

Will you apply for a credit card from your local bank? Will you apply for a credit card online?

Both options make perfect sense and all depend on what you’re more comfortable with. I’ve listed the best student cards on here for your convenience.

If you’re not comfortable with online offers, you should do what I did. I got my credit card with my local bank as soon as I turned 18. I started off with the lowest limit possible and then worked my way up while I got into the habit of using credit.

Avoid the deadly sins of credit cards.

If you plan on applying for your first credit card, you need to watch out for a few common mistakes that are easy to fall victim to. What are these deadly sins for those looking for a new credit card?

1. Signing up for some random offer in the mail. Accepting some random credit card offer that comes in the mail is like buying the first car that you see or marrying the first person that you kiss. It helps to shop around and see what’s out there. Don’t accept random offers from credit card companies just like you don’t accept drinks from strangers.
2. Opening a credit card account for a free gift and then closing it down. This strategy just makes no sense. You get some crappy gift that’s worth less than a cup of coffee and you’re stuck with the credit card. Most of us will get too lazy to even shut the account down when the card comes in the mail. Then we get stuck with this random credit card. If we do shut the account down eventually, our credit score takes a slight hit. It’s just not worth it.

If you want to apply for a credit card right now, this article should help you get started. For more detailed information on dealing with credit, you should check out my premium guide on how you can completely conquer credit. As always feel free to leave a comment or shoot me an email with any further questions.

Even if you get one of the best credit cards for students on the market and plan on being a wise spender, you can still end up in debt. The problem is that far too many young people blame the credit card company for being in debt, instead of taking ownership.

Blaming your credit card company for being in debt is very easy. Have you ever met someone that has blamed someone else for their problems? I’ve met far too many people like this. I’m all about taking ownership. Since you’re still reading Studenomics, then I’m 100% positive that you’re all about getting the most out of life.

Using your student credit credit is no different than your personal fitness. If you don’t know how do credit cards work, you can check out yesterday’s post on what you need to know about your first student credit card.

Right now I wanted to point out a few things college students can do with their finances instead of blaming credit cards for being broke:

Find the right credit card.

I highlighted the best student credit cards out there at the beginning of this post. Before you do anything, you need to find yourself a credit card with a low limit (about $500) and preferably one with your current bank to continue building a relationship. The best part about a low limit like $500 is that even if you max out your card, you’ll have a much easier time paying off $500 than you would $5,000 worth of debt.

Accept that a credit card is still money.

A credit card is real money. You can argue all that you want, but you won’t change this. Just because you never see the money it doesn’t mean that it’s not real.

I’ve heard various arguments on this site about how this isn’t fair and how credit card companies are supposedly loaning us money that doesn’t exist. This is irrelevant. The point is that you’re borrowing money from someone in exchange to purchase something. The money just happens to be electronic.

A credit card is money and if you max out your credit card, you’re going to have to come up with the money and you’ll be hit with interest fees every time you miss payments. The longer you keep a balance, the more money that you’ll spend on interest.

This can have a severely negative impact on your savings and your credit score.

Try using cash for a bit.

Swiping a piece of plastic is simple. Using your credit card is easier than ever before. It has become so easy that Amazon is kind enough to store my credit card information so I don’t even have to type in my credit card number in again if I want to purchase a book in a split second.

If you find that a credit card is hurting your finances instead of being used as a tool, then you should try to use cash only for a little while. After a few weeks you can determine if the credit card is the problem or if it’s your lack of money management skills that’s hurting you. I personally support paying yourself first and using cash to get ahead financially.

Those are my favorite tips for the times where you can’t stop using your credit card. What are you going to do?

If you’re a college student looking to finally start saving money, you should be realistic with what you’re doing. If you’re not ready to use a credit card just yet, then there’s no shame in waiting. If you know that you can resist the urge to splurge with your plastic, you need to put your card away before you max it out. You can start using your credit card again when you know that you’re ready.

Are you ready for your first time? Are you ready for your first credit card? Is it time for you to start paying for stuff on credit?

I was chatting to a friend about booking trips online. We eventually got into payment methods. We were planning to go on a group trip (this is a while ago). The issue arose that none of my friends had the credit limit to book a group trip on their card. I told everyone that I didn’t mind doing this as long as everyone gave me the money in advance.

We get into talking about credit cards. One of my friends mentioned that he has a school specific credit card because he wanted the free t-shirt. Yes, the usual first time credit card story. You want the free gift so you sign up for the credit card.

As funny as it seems when you’re looking back, while signing up you see nothing wrong with what you’re doing. I’m not here to judge anyone that messed up their first time around with a credit card. I’m here to give general tips to those of you reading this that are looking to apply for your first student credit card.

What do you need to know about applying for your first student credit card?

You need to know what COULD happen with your first credit card.

None of us plan on failing. Nobody reading this wants to get into credit card debt. We all want to be successful and live amazing lives. Then life just sort of happens. We don’t get the best of grades. We don’t save as much money as we would like to. We aren’t satisfied with where we are in life. We don’t even realize how we got into credit card debt.

When I wrote about dealing with your first credit card a few years ago, long time reader Anna wrote in with a scary comment:

I had about 14 credit cards by the end of my college career. I had a few store cards and your basic student credit cards. You mean I can save 15% today? I can cancel the card when it arrives in the mail? Sure. You say you will cut up the card or cancel it when it comes. But there it sits all shiny and new and you place it in your wallet. You definitely will NOT use it on your next trip to the store. But there you are in the store and there are ‘perks’ for cardholders. You have to use your card to get those perks. So you use the card and then you’re stuck making $7 an hour and can barely fill your gas tank and you let a $45 charge for a pair of jeans sit on your store card. You only pay the minimum payment of $10 that month and it continues to accrue interest. 

Listen folks, don’t do it! Pay cash. You’re already going to likely have student loan debt. You don’t want to graduate and immediately have to go into consumer credit counseling, like I did. I learned my lesson.

I don’t want to scare you away from financial skills like using a credit card or learning how the stock market works. I just want you understand what COULD possibly happen.

There are new credit card regulations.

The Credit Card Act of 2009 has really changed the whole process of applying for a student credit card. If you want a credit card now you’re going to need to prove that you have an income or you’re going to have to find a co-signor. Just please keep this in mind as you search for your first card.

Your first student credit card can help you build credit.

When you get your first credit card you can start to build your credit and build the path towards the rest of your 20s. You can set yourself up to get a much better interest rate on a home mortgage or car loan when you have high credit. I don’t want to get off-topic, but if you want to learn more you can ready about what a good credit score number is.

You should wait to apply for your first student credit card.

Why should you wait? There’s simply no rush for you to get access to credit. If you can wait until the last minute to start that assignment, why rush to sign up for a credit card?

Are you ready to apply for your first credit card? What else would you like to know about student credit cards?

Let’s say you do want to invest your money. Do you want to loan or do you want to own? What sort of risks would you be willing to take?

College graduates are often faced with two simple options for investing money when they get their first job. You can figure out how the stock market works and become an owner by buying shares in a company. On the other end, you can buy bonds and become a loaner since you’re loaning out money to the company when buying bonds.

Is it better to be a loaner or an owner? Should you invest in the stock market? Should you buy bonds instead? This article will look at both sides of the coin so that you can make your own decision.

What do you need to know about being an owner?

When you buy stocks you own a share of the company. Each share that you own holds the potential to increase in market value. This means that if the share increases and you choose to sell it, you’re going to make a nice profit. If you know what you’re doing and conduct your own research on a consistent basis, you can see a decent return on your investment.

Buying and selling shares for an expected profit is definitely much more riskier than buying bonds. It used to be argued by financial “experts” that stocks outperform bonds, but this hasn’t been the case recently. More young investors are leaning towards exiting the stock market and finding other options for their hard earned money.

According to an article on CNN Money, by 2008 the bond market had started to greatly outperform the stock market as a whole. If you understand stock market basics, you’ll know that even well-managed companies can decrease in value because of market swings and economic problems. This is why you must understand the risks that come with buying and selling shares.

Who would you want to loan money?

When you buy bonds you’re loaning money. The money that you earn is the interest that the company pays you for borrowing your money. Essentially a bond is an IOU and the issuer of the bond will pay you back the full loan amount with interest payments.

The obvious setback is that you won’t earn much interest on your money with a bond. The safer an investment, the lower the return usually is. This is why it’s not worth placing a large chunk of your savings into bonds.

Before you consider either to loan or to own, you need to ensure that you’ve dealt with any debt that you may have remaining from your student credit card. It’s also important that you once again consider your risk tolerance. How much risk can you really handle?

Now I’m curious to know, do you want to start investing in bonds? Or will you put your money in the stock market?

Can I get a mortgage? Is it possible to be approved for a mortgage after college? Can I own my own place before I’ve saved up a lot of money?

When I wrote about investment options that are better than investing in the stock market, I knew that I would get feedback from the more ambitious readers. I received two emails on the topic. Then earlier on today I ended up meeting up with my friend from school who’s working as an Advisor at a Credit Union now. On top of him spilling his coffee and me making a scene out of it, we got into talking about what he looks at when someone comes in to apply for their first home mortgage.

Before we get started I wanted to mention that I’m not here to tell you if it’s better to buy or rent because I’m here to cover the process of applying for a mortgage.

Can I get a mortgage? Let’s look at what you need to take off before you even apply for a mortgage.

Your credit score.

Before anyone even considers loaning you any money at all, they’re going to look at your credit score. This is simply a tangible number that gives a snapshot of your history of handling credit. You can argue all that you want with it, but as a young person applying for a mortgage you’re going to have to get your credit score up there before you ask for a penny.

If you don’t know what’s a good credit score, I suggest that you check out my previous piece on the topic. You can check out your credit score from all three credit bureaus with Equifax right now. You can also get your free Transunion credit score from Credit Karma as well.

Your income and job security.

How stable is your job? The loaner won’t want to loan money to someone with an unstable job because then you won’t be able to pay your mortgage payments and you might consider walking away from your mortgage (as seen with the recent economic issues). This makes perfect sense because why would you loan money to someone that might not even have a job in six months?

Another factor with applying for your first mortgage is your income. There’s a ratio known as TDS (which I’ll explain in detail in another post) where the loaner will look at your income and compare it to your total expenses. I’m not going to bore you with the details. Long story short is that you won’t be approved for a mortgage if your income isn’t substantially higher than your expenses.

Just so you know, if you’re a young entrepreneur you’re going to have a pretty challenging time trying to prove that your income is stable.

Your savings.

How much money do you have saved up? How much of your savings will go towards your home down payment? The company where you apply for your home mortgage will want to know that you have money saved in the bank in case you lose your job or your business tanks. They simply want to know that you’re going to be able to cover your mortgage payments in the worst case scenario.

Your residence stability.

My friend mentioned to me that they take into account your residence stability in the sense of how often you’ve moved around in the last few years. This isn’t a huge factor in applying for a mortgage if your credit score and savings are up there. When there are issues with your credit and how much money you’re putting down, then the loaner will want to see how stable you’ve been with where you live. They want to be sure that you’re going to actually want to live in the home that you spend so much money on.

It’s time for you to answer the question. Is it possible to get a mortgage after college? In certain situations you can get a mortgage a few years after college. If your finances are not where you want them to be just yet, then there’s no shame in waiting a little longer before you buy your own place.

If you want more information on this topic you can check out my eBook on deciding to buy or rent a place in your 20s.

You guys know why I stopped investing in the stock market. I didn’t just pull out of the stock market to hold my money in a basic savings account. I wasn’t just afraid of the risk that came with owning stocks. I actually had bigger goals for my savings. Today I wanted to share what I feel are better options for your money that don’t involve investing in the stock market.

What are four better options for your savings than investing in the stock market?

Unique experiences.

There’s so much to see in this world that it’s a shame to not even try to see some of it. After looking for more options for what to do after college I decided that I really wanted to take some time to travel the world for a bit. While I didn’t get to see the whole world (is it even possible?), I got to travel about a dozen times over the past few years.

You can save all the money that you want and prepare for the future. The problem is that from reading blog posts, talking with older friends, and everyone I speak with, I find that everyone regrets not travelling enough. While I wasn’t sure about what to do after college, I did know that I didn’t want to turn 30 and regret not seeing what this world had to offer.

Real estate.

The reason that I support real estate is that you actually own something. The decision to buy or rent a home in your 20s is a big one. This is why I decided to put a lot of time and research into my decision. I ended up deciding to buy a condo that I could live in for a year or so. I lived in the place for a year and then I rented the unit out so that I can travel more.

I must note that when I mention real estate I’m not referring to your primary residence. I’m referring to becoming a landlord through purchasing a rental property.

Education.

We all know that knowledge is power. The more you know the more that options that you have open to you. I’m also not referring to the traditional form of education. While I did get my college degree, I also took advantage of other educational opportunities. I took an online course, got my license in Personal Training, read many books, attended a conference, and took advantage of any chance I had to meet anyone in my field.

I fully believe that the best option for your money is to invest in yourself. Albert Einstein said it best when he said that insanity is doing the same thing over and over again expecting different results.

P2P Lending.

I must admit that this is a new form of investing that I’m slowly starting to look into. I haven’t really covered this much around here yet. This form of investing is rapidly expanding and I plan on covering it in greater detail in the near future. For now you can check out the home page of Prosper for more details.

These were all options that I found to be much more beneficial to me than than investing in the stock market. The great news once again is that you don’t have to stick with just one option for your money. You can spread your money out between all of these options to see what works for you.

I started investing my money in the stock market when I was still in high school and didn’t even have my own account setup yet. At one point I was pretty serious about trading stocks. Then around 2008 I finally made the decision to not invest in the stock market any longer. I sold almost all of my shares, took in some profits, incurred a few losses, and pretty much washed my hands off the stock market for the time being. I haven’t gone back to the stock market since then. I kept shares in one company because they still pay a decent dividend and it’s only a few hundred dollars that I have invested with them.

Why did I leave the stock market? I’m going to share why I stopped investing in the stock market.

I didn’t want to sit by the news all of the time.

Investing in the stock market isn’t as passive as it may seem from the outside looking in. You need to watch the news and stay on top of things so that you know what’s going on in the industries that you’ve invested your money in and the market as a whole. I just didn’t feel like following the news that closely any longer. I also didn’t want to stress over any bit of negative news that would come out (and believe me, lots of negative news comes out). I now don’t have to worry myself over the various economic problems that happen all over the world.

When you invest in the stock market you don’t see what you own.

When you buy shares you don’t get anything. You own a piece of a company. You never really get to see what you own. For some investors this just isn’t enough. I like to own tangible items. This is why I ended up putting my money towards a condo. I just wasn’t too crazy about owning something that I could never physical see.

I wanted to take different risks with my hard earned money.

I wanted to change the kinds of risks that I was taking with my money. The stock market isn’t the only option nor is it the best option for your money. There are many other and better investment options in your 20s. I didn’t want to tie up my savings in stocks and I decided to make some major changes. This will be covered in greater detail on another day.

Now that you know why I chose to leave the stock market, you can see where I decided to put my money. You’re going to have to check in tomorrow for that post.

What it comes down to is that investing in the stock market isn’t for everyone. At the moment I’m pretty much out of the stock market, but who knows what the future holds?

Should you invest in the stock market in your 20s? Is it worth risking your money at this age? I really wanted to cover stock market investing in your 20s on Studenomics for a long time now.

If you’re out of college and making real money for the first time, you’re likely thinking about what to do with your money. If you read our tips on stock market basics the other day, then you might be curious about finally getting started in the stock market. I have a strong feeling that you’re debating if you should start investing in the stock market, but you just don’t know if it’s the right move for you at this point.

I hope to make this decision easier for you today. I want to look at what your decision on investing in the stock market should depend on.

What does investing in the stock market depend on?

Whether you get into the stock market or not depends on your level of risk tolerance. Can you handle risk? Can you sleep at night knowing that you lost some money during the day? Can you handle the market swings? Can you handle the risk of losing your savings?

Simply put, getting involved in the stock market isn’t for those that can’t handle risk. I learned this about the stock market the hard way the first time around. I worked all summer after grade ten and then put all of my savings towards the stock market. I thought I was the smarted guy in the world because I had my money in the stock market. I thought I was going to get rich. Then I saw that my stock dropped and I lost half of my savings.

I didn’t run away from stocks right at that point, but I learned that I definitely didn’t have the guts to take big risks with my money. I also learned that I especially hated taking risks when I had to mow lawns for $7/hour to make money.

This leads into my next point on stock market investing in your 20s.

There are many success stories about the stock market.

For some odd reason, success stories about hitting it big in the stock market get out and 20-somethings get all excited about the idea of investing in the stock market once they get some money in the bank. There are also many guides out there on how to play the stock market.

I’m not going to promote any stock market success stories because truthfully more young investors get played by the stock market. I want to warn you right now that if you buy a stock there’s no guarantee that the price is going to go up just because of what some “expert” on the news or the guy at the gym said.

I covered how the stock market works in the past, so I won’t go over the same details again. You can check out that post for more information.

What if you want to invest in the stock market right now?

If you want to get started you can create an account with an online stock broker (listed below). The sign up process shouldn’t take long at all. Once you sign up with the stock broker, you just need to setup your banking infrastructure so that you can transfer money between the accounts. The process is a one time sign up that might take a few minutes. Once you’re started with your account, you can start buying and selling stocks.

Click here to sign up for an account with TradeKing.

Before you sign up with an online stock broker and start investing your money, I urge you to conduct further research. You work hard for your money. I don’t want to see you get convinced to jump on some “hot” stock pick that ends up being a complete flop.

I hope that by this point you’re not worried about understanding the stock market. Deciding to invest in the stock market in your 20s is a big move. Are you ready?

What’s the best credit card for college students? Some would argue that there isn’t one and that college students should avoid credit cards at all costs. On the other hand, the argument can be made that wise student credit card use could lead to many benefits down the road.  I can only speak from my experience with student credit cards. For me a credit card in college was the quickest way to access credit and to start building my credit. Even though I messed up (a few times), I was still able to build my credit and buy my first investment property in my early-20s. You can also start to build you credit in college.

But I’m not here to preach.  Below you’ll find a quick review of five credit cards designed for students which are all good to own.  If you decide to apply, make sure to stay within your credit limit and ALWAYS pay your bill on time.

Martin’s Pick For The Best Credit Card For Students

Citi Forward Card for College Students – My favorite student card is most definitely the Citi Forward Card for College Students.  This card gives students a 0% intro APR on purchases for 7 months and when that expires the APR becomes 13.99% – 22.99% variable.   The card has no annual fee and requires no cosigner … which is rare for student credit cards these days.

The Citi Forward Card for College Students also has a great rewards program, offering students five ThankYou points for every $1 spent on books and music and at restaurants and movie theaters.  One ThankYou point is given for every $1 spent on all other purchases and this card offers up to a 2% APR reduction if you make your payments on time and stay within your credit limit.  1,000 ThankYou points are earned when you sign up for paperless statements and up to 1,200 bonus are awarded for being a responsible student.

Discover More Card – The Discover More Card comes in a close second with a 0% intro APR that’s slightly longer than the card above; 9 months.  The standard APR will become 13.99% – 20.99% variable and every cardholder will earn up to 5% cash back on purchases.  0.25% cash back is earned on the first $3,000 spent annually and then 1% on all purchases beyond the $3,000 mark.  5% cash back is earned on select purchases every quarter and the Discover Student Card does not charge an annual fee.

Citi Platinum Select Card for College Students – Students that own the Citi Platinum Select Card for College Students will receive a 0% intro APR on purchases for seven months.  They’ll also receive 5% cash back at gas stations, supermarkets, drug stores and utilities for the first six months and 2% cash back in rotating categories each month.  1% cash back is earned on all other purchases and an average of 5% cash back is earned when shopping online through the Citi Bonus Cash Center.  The Citi Platinum Select Card from College Students has a standard APR of 13.99% – 21.99% variable and charges no annual fee.

Journey Student Rewards from Capital One – Another credit card with no annual fee, Journey Student Rewards from Capital One gives students 1% cash back on all purchases, without any hoops or spending requirements to meet.  Unfortunately, there is no introductory APR or other big benefits to mention and the standard purchase APR is 19.8% variable.  The draw on this card is that it’s designed for students with less than perfect credit (average credit to be precise) so obtaining approval is a tad bit easier than other cards above it on this list.

Orchard Bank Classic MasterCard – I’ve decided to add the Orchard Bank Classic MasterCard to the list, even though it’s not a student credit card and the offer isn’t that good.  Cardholders receive an APR of 7.9% – 19.9% variable depending on credit history and will be charged an annual fee of between $35 and $59.  No rewards program is offered but the Orchard Bank Classic MasterCard is designed for people with bad credit.  Finding a credit card with a sub-600 FICO score is next to impossible and even though this has an annual fee, it’s a great way to build credit (if you NEED to).

Deciding what’s the best credit card for students strongly depends on what your goals are and what your current credit status is. Finding the best college student credit card is also very important for those of you that want to use credit cards and not get used by them.  If I missed any credit cards for students that you would like to put on this list, then please let us know.