The ONE class every college should make mandatory

I am lucky enough to have just started my colleges senior seminar class: Seminar on Life Management.

Another name for this class could be: Adulting 101

This class covers a variety of post college necessary knowledge such as: accepting/negotiation your first job offer, taxes and IRS forms, health insurance, saving/investing/401K, budgeting and common expenses, debt/credit cards/credit score, and creating work-life balance/good habits.

That is a lot of material to cover in just 5 weeks, but I am very grateful that I have the opportunity to learn these things and ask questions before I encounter these in real life, a lot of college grads do not get this chance.

Here are some of the key things I have learned:

Negotiation — Knowing the industry appropriate salary range helps you to negotiate and find compromise more easily.

Many people hesitate to negotiate because they lack confidence. Develop this confidence by negotiating more frequently. Be pleasant and persistent but not demanding.

Be professional at all times — do not get frustrated and angry if a negotiation does not proceed in your favor. Conditioning yourself to negotiate at every opportunity will help you become more comfortable, confident and successful.

Most importantly, know what you are worth and be able to back it up with facts.

Payroll Deductions — Payroll deductions are wages withheld from an employee’s total earnings for the purpose of paying taxes and benefits — like health insurance and 401K withholdings.

Taxes: FICA (7.65%), Federal (based on income level, ranges from 10–37%), State and Local (location based)

It is important to calculate your net pay (what you have left after taxes and deductions) when you are creating your budget and calculating your expected expenses.

Health Insurance options

4 common types of health insurance are: health maintenance organization (HMO), preferred provider organization (PPO), Exclusive provider organization, point of service (POS)

Saving/Investing/401k

Saving money is important because it helps protect you in the event of a financial emergency. Additionally, saving money can help you pay for large purchases, avoid debt, reduce your financial stress, support you in emergencies/unexpected situations, and provide you with a greater sense of financial freedom.

In order to build your wealth, you will want to invest your money. Investing allows you to put your money in options that have the potential to earn strong rates of return. If you don’t invest, you are missing out on opportunities to increase your financial worth. Compounding is another key reason to start investing today. The longer you have to compound the higher exponential return on your money.

One of the most powerful advantages of participating in a 401(k) is the money you save in taxes. Your 401(k) contributions are taken out of your paycheck before taxes are deducted from your paycheck. That means your gross income is reduced, so you pay less in income taxes.

Budgeting + Common Expenses

The average young college grad has a monthly salary of $3000 before taxes and $2500 after taxes.
The average monthly rent in the United States is just shy of $1,500 while monthly utilities come out around $400 (gas, water, trash, cable, internet, electricity).
The average person on a moderate budget spends about $290 on food per month. If you plan to be incredibly thrifty with food shopping, it’s about $183.

Want a cell phone? Those average around $60 per month per person.

Have student loans? The average monthly payment is $400

According to AAA, the average monthly ownership cost of a vehicle is $774 per month. That include the payments as well as the fuel, maintenance, insurance, registration and occasional repairs needed.

After factoring in the benefits of a roommate ($950)

That leaves $79 remaining to cover things such as medical expenses, toiletries, household supplies, going out to have fun, emergency fund savings, gifts and more.

Credit + Debt

Credit is essentially borrowed money that you can use to buy everything from groceries, to a car, to a new home, and the agreement that you’ll pay the lender back at a later date, …with an added fee.

Carrying too much debt can have a negative influence on your credit score, making you look riskier to future lenders because you’ve borrowed more than you can afford to pay back.

A good credit score is important if you want to accomplish things like leasing or buying a car, renting an apartment, buying a home, getting a job or getting approved for a credit card.

Making good financial choices and using credit only as you need to will keep you from creating too much debt.

Good Habits

These days, achieving work-life balance can seem like an impossible task. Technology making workers accessible around the clock combined with fear of job loss incentivizes people to work longer hours.

In fact, a whopping 94% of working professionals reported working more than 50 hours per week and nearly half said they worked more than 65 hours per week in a Harvard Business School survey. However the compounding stress from the never-ending workday is damaging. It can hurt relationships, health and overall happiness.

Healthy habits that can combat this include: unplugging from tech at a certain time each day, making time to eat healthy food, exercising regularly, using your time efficiently, and delegate tasks.

Remember that the person you will be in 5 years is largely dependent upon the books you read, the people you build relationships with, the food you eat, the habits you create, and the skills you build today.

Set yourself up for success by mastering the basics of adulting.