This Is the Exact Personal Finance Advice All Engineering Grads Need
Living as an engineering student for years, on a student budget, requires a very special set of financial survival skills. Ingrained habits like living frugally, postponing major expenses, and maybe not looking too hard at your debt balances while your loans are in deferment are necessary for getting through when money is tight.
As a newly-minted engineer, you should enjoy the rewards of completing this stage of your education, because you’ve certainly earned it. But don’t let the frugal mindset that propelled you during your college years start to withdraw as those first hefty engineering salary paychecks roll in. Even if you don’t see yourself becoming a big spender, when the transition from student to full-time employment happens, it’s easy to just tear up your student budget without creating a new one.
Whether you’re a traditional student or returned to advance your engineering career, engineers have unique financial challenges and opportunities. Here are some important things to know for any new engineers looking to navigate their finances post-graduation—without eating ramen for the rest of their lives.
Your job search may cost you
Just how much you spend on your job search will depend on your negotiation skills as well as how scarce your talents are. Engineering talent is, by nature, high-value and highly specialized, so many potential employers are willing to pick up travel costs. This is particularly true of fields identified by the Bureau of Labor Statistics as significantly high-growth, like biomedical, environmental, marine, and petroleum engineering. However, any engineer can (and should) ask a recruiter if the company they’re interviewing for is willing to pay the comparatively small (for them!) cost of a plane ticket and hotel stay.
Even if your big-ticket expenses are picked up, however, your trip probably won’t be 100% free. Recruiters may not have a good system for picking up your miscellaneous costs, like travel to and from airports. They may take you out to a post-interview meal, but you could be on your own for the rest of the food you’ll buy on the trip.
There are other, less-obvious costs that can really add up. If your potential employer is in a terrific location and you book an extra day or two to do some sightseeing, you’ll have to absorb those costs as well. And on the home front, you may be accumulating extra expenses in pet or child care while you’re being wined and dined in a faraway city.
You may have heard that job search expenses are tax-deductible, but few fresh grads can count on that. As explained in IRS Publication 529, this rule specifically excludes expenses for first-time job seekers. (Keep the rule in mind for your next job search, however.)
Adulting can have some surprise expenses
Lots of people get financial support from parents to get through college. According to Sallie Mae, parents on average paid for 29% of college costs in the 2015-2016 year, and borrowed another 7%. Relatives and friends picked up another 5%, on average. But you may be surprised to learn about other expenses that will become your responsibility. From holiday travel and incidentals to car insurance and cell phone plans, it’s easy to overlook that someone else may have been paying those bills until you have to take them on for yourself.
Speaking of cell phone plans, it can actually make good financial sense to stay on a family cell phone plan and pay your share. But being on your own plan gives you more freedom to manage your account and upgrade your phone without getting anybody else involved. In any case, as you read this, your parents could be reading articles like this one telling them to pull back on financial support as quickly as possible. All we’re saying is—be prepared.
Conferences and societies are going to get more expensive
Engineering societies often have a strong on-campus presence, and use subsidized student membership to attract young professionals. However, those membership fees can climb significantly once you leave school. Membership in IEEE, the world’s largest technology professional association, jumps from $32 per year to $199 once you’re no longer a student. Similarly, the Society of Women Engineers ups its membership fee from $20 to $100 after graduation.
Traveling the world and attending research conferences also gets significantly more expensive when you leave school. Grad students frequently get travel paid for by grant money or a professor’s resources, but a new employer may not be ready to spend that kind of money on a new hire.
For example, the 20th International Conference on Electrical Machines and Systems (ICEMS) in Sydney, Australia charges AUD$850 for regular guests, and just AUD$500 for students. Closer to home, the fees for the IEEE Energy Conversion Congress and Expo in Cincinnati are $350 for students, but between $1,000 and $1,500 for the general population.
If continued and uninterrupted attendance at an annual conference is important to your career growth, you’ll either need to budget for the expense, or negotiate for travel allowance from a new employer.
Some networking opportunities come with hidden costs
Engineering grads earn more at graduation than any other field, according to the National Association of Colleges and Employers. That’s good news for you, but it’s also good news for people who want to sell you things. Mixers and happy hours for high-tech professionals can also be thinly-veiled marketing cattle calls, bringing together newly-minted high-earning professionals like yourself with a room full of salespeople all looking for a cut of your paycheck.
Be alert, be wary, and remember that some free happy hours aren’t worth the price of admission, so to speak.
Consider refinancing options
It’s easy to overlook your student loan principal balance and interest rates while you’re still attending classes. Once you graduate, however, those loan payments are going to become a real and often significant portion of your monthly spending. You have more control over how and when you pay off your debt than you may realize.
You can look into student loan refinancing as an option to reduce your student loan interest rates. SoFi members, for example, save an average of $228 a month, or $22,359 total, when they refinance. Over the long term, this could mean becoming debt-free faster, and putting that portion of your paycheck toward other goals—like attending all those conferences.
After your engineering diploma is safely framed, check out student loan refinancing with SoFi. Learn about refinancing your loans with SoFi here.