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4 Steps to a Post-College Financial Plan

NEW YORK ( TheStreet) -- You might get a good argument that U.S. college graduates have never had it so bad.

Of course, college grads back in the 1930s, during the Great Depression, might debate the point, as would graduates in the late 1970s and early 1980s, when economic malaise ruled the land.

But with a former U.S. secretary of education claiming only 150 of 3,500 U.S. colleges are actually worth the money, and 43% of all Americans 25 and under reeling from college debt, today's graduates surely aren't catching many breaks.

Consider the following statistics on college debt compiled by American Student Assistance, a Boston-based higher education nonprofit:

  • Of 20 million current U.S. college students, 12 million borrow money to pay tuition and living expenses.
  • The U.S. has about 37 million college loan borrowers (among current and former students) with outstanding student loans in 2013.
  • In total, there is between $900 billion and $1 trillion in total outstanding student loan debt in the U.S.
  • The average student loan debt is $24,301 as of the first quarter of 2012, with 25% of all borrowers owing more than $28,000.

To add to the problem, graduating college seniors face a 16.2% unemployment rate, according to the Economic Policy Institute.

How can college graduates manage to gains some financial traction, or at least buy some time until the economic picture brightens for them?

The California Society of CPAs has some good ideas that could make your college debt recede faster that you'd expect:

Step 1: Get a grip on financial goals. Don't make a budget until you create a list of your short-term financial goals, including buying a car or renting a decent apartment. Then make a list of your long-term goals, including getting married, buying a house and saving for retirement. Ask yourself how much you'll need to save to achieve those goals, then set out to meet them. Start with a good financial savings calculator such as this one.

Step 2: Assess your monthly income and expenses and create a budget. The CPA group advises adding up all of your income to help create a good budget. "In addition to their regular salary and wages, they need to be sure to include other types of income, such as dividends, interest and child support," the group says of students. Also, add up all of your monthly expenses, which includes credit cards and college loans.

Next, estimate your monthly spending, or expenses. Divide those into two categories: fixed (such as housing, food, work clothing and transportation) and discretionary (such as entertainment, vacations, clothing you buy as a treat and hobbies). Simple subtraction will show what you have to live on every month.

Step 3: Consolidate student loan debt to reduce expenses. College loan debt consolidation enables borrowers to roll all of their college loans into a single large loan, usually with a longer term and a lower interest rate. "That allows you to write one check for a loan payment instead of many, while lowering their total monthly payments," the group says.

Step 4: Be vigilant in tracking your budget. College graduates need to monitor their budget every month and make spending adjustments where necessary. Include a cash reserve, if possible, to pay for surprise expenses such as a major car repair or to cover costs during an illness or if you're laid off from work.

Look, nobody is saying this is easy -- especially the emergency spending stash, which is tough to accumulate if you can't find decent work.

But if you apply these four simple steps diligently and steadily, you'll likely find yourself way ahead of the game in covering your college loan burden so you can get on with the rest of your life.

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