So, You Just Graduated From PA School. Now What?
Jun 22, 2022Congratulations and welcome to your new career! This is one of the most exciting times of your life. However, this is also a pivotal moment for your financial success. This is a time to learn and remain frugal. If you are able to have some self discipline and hold off on that new BMW, you will be providing a huge gift to your future self. Both Shayne and I made plenty of mistakes at the beginning of our PA careers. Lucky for you, we have no shame in sharing the lessons we learned. Here are the steps we would take if we were again starting as a new PA:
Step 1: Create a plan for your loans.
During school, loans were the furthest thing from our minds. The minute we graduated, we were welcomed into our new reality of massive debt (JORDAN: see how I paid off $53,000 in my first year). This will be an unfortunate situation for plenty of you as well. Start by getting a complete picture of your loans. Where are they held? Are they federal or private? Do you have multiple loan servicers? Do you still have undergraduate loans?
PRO TIP #1: Create a spreadsheet that allows you to visualize your loans in their entirety, as this is something that you will be coming back to over and over. Below is Shayne’s example from early 2021:
Once you have an understanding of your loans, try to develop a payback plan. How fast do you want to have your loans paid off? Are you eligible for the Public Student Loan Forgiveness (PSLF) Program? Or, is refinancing something you should consider? It may be helpful to start by consolidating your loans to one servicer (while keeping them federal) so the money is in one place (this will be necessary to be applicable for PSLF, and make sure you are choosing the right loan!).
No matter what you decide, start paying on your loans as soon as you can. Utilizing the grace period after graduation only increases the amount you owe and the amount of time you will be in debt. This can all seem very confusing in the beginning which is why we dedicated a whole chapter in The PA Blueprint to student loans. Commit to your loan payback plan today!
Step 2: Comb through your contract.
Do you understand everything in your contract? Do you know when you can start contributing to your 401k/403b account? Do you know your vesting schedule? Having an understanding of all of this can help direct your loan payback and general finances your first year out of school. Building the habit of contributing to these accounts (plus understanding how to invest) early in your career will make you a millionaire by the time you retire. Contribute early and often!
PRO TIP #2: Consider compiling all of your financial accounts into Personal Capital, Mint, or other alternative similar companies. This will help get you organized and allow you to see both big and small pictures of your finances.
Step 3: Read some financial books.
Some of these links are referral links, and as an Amazon Affiliate, I would receive a commission from qualifying purchases at no additional expense to you.
In order to know where/how to invest (plus why it is so important early in your career) you are going to need to read some books. Try to read at least three. I would highly recommend The Millionaire Next Door, Simple Path to Wealth, and I Will Teach You to Be Rich. These will give you some baseline knowledge to start your financial journey. This should be all you need to make some sound investments (hello Index Funds!), but hopefully it will open your mind to the world of financial independence and leave you thirsty for more!
Other notable podcasts, books and blogs:
PA the FI Way (of course)
Step 4: Keep your costs low.
You just lived like a student for 2+ years. Do you think you could do it for another 1 or 2 more? Keeping your expenses low for as long as you can will put you miles ahead. Consider moving in with your parents or friends (if it is an option), living with a roommate, or getting a cheap/small place. Keep your current vehicle and delay upgrading until you absolutely have to. It got you through school and you haven’t quite earned a new luxury SUV. Wait to upgrade your wardrobe. You aren’t a surgeon who needs to impress with a nicely pressed suit.
There are any number of new temptations with a new paycheck, but beware! Between loans, taxes, and living expenses, that money will not go nearly as far as you would think. Learn to live on half of this and your working life will be only ~17 years! Spend it all, and you will never retire. It’s that simple.
Graduating from school and starting a new career is a whirlwind. Some days will provide a new level of satisfaction you have never felt, and others may be straight miserable. Just know we have all been there and you are not alone. Following the above four steps will remove some of life’s other stresses and put you on a path towards career longevity or financial independence if that is what you choose!
Thanks so much to Kat for the opportunity to write for the PA The FI Way blog. You can find much more on the PA career at www.thepablueprint.com.
Thanks to both Jordan and Shayne for writing this guest post! If you’d like to listen to them on the PA the FI Way podcast, check out episodes 016, 037, and 040 on the podcast player of your choice.
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