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Question from 22-year-old Toronto woman: I just graduated from university and I’m hunting for a full-time job in my field. I live at home right now and I have $20,000 in OSAP [Ontario Student Assistance Program] loans. Should I keep working my part-time job ($11.40 an hour, 20 to 25 hours a week), which takes away from my ability to search for a full-time job? How much should I be asking for? How much do I need to live? Should I keep living at home or move out? I’m not sure where to start and feel very overwhelmed.

Answer from Shannon Lee Simmons, a financial planner and founder of The New School of Finance: Congrats on graduating. Trying to get your first job can be daunting and scary. There are a lot of unknowns. Below are some ways to financially survive life after graduation.

Shannon Lee Simmons is the author of the book Worry-Free Money: The Guilt-Free Approach to Managing Your Money and Your Life.

Keep your living expenses low

First things first. A lot of things are out of your control after you graduate. Where will you work? What will you earn? Will there be benefits? So many questions with very few certainties. But, you know what is certain? Your expenses. You control these. Yay! So, while you're on the job hunt, control what you can and keep your living expenses as low as possible. You’re very lucky to be able to live at home. This is the best way to keep your overhead low while you’re not earning full time wages. Keep it up as long as you can. For those who aren't able to live at home, get a roommate to share the cost of housing. Also be sure to take advantage of any student loan grace periods where you don't have to make payments and since you have a government loan, apply for repayment assistance. If you qualify, it means that you and both the provincial and federal governments will be making payments on your loans.

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Bring in any money you can to stay afloat

In my opinion, working part-time while you’re looking for a full-time career is the best thing to do. You’re putting money in your pocket to help pay for your life but you’re not working 40-plus hours a week, which leaves no time for your job search. So I don’t think you should quit. Use that money to pay the bills you do have and your basic discretionary spending expenses. If you’re in a student loan grace period and don’t have to make payments, try to sock some money away for emergencies during this time. If you have to start repaying your loans, be sure to direct some of your part-time income to the principal. It’s never too early to start trying to repay these. Even a small amount, like $50, above the minimum payment makes a huge difference in your overall debt repayment plan. It can take years off the plan.

Figure out what your minimum salary needs to be

One of the hardest things to figure out is how much money you need to earn to float your life. If you're looking for entry level full-time positions, you have to keep expectations realistic for your industry. Some industries pay very well, others may not. That's why keeping your overhead low during these years is key to being able to take a job that may land you on a good career path in the long run. Calculate what you need to earn like this.

Step 1: Tally up all fixed expenses.

Your fixed expenses are the expenses that you must pay no matter what each month because you’ve signed a contract. They are predictable and guaranteed. Examples include rent, cellphone, minimum debt payments, car insurance, car payments, gym membership, etc. If you’re living at home and would like to move out, be sure to add in future rent that you think you’ll have to pay. As an example, let’s say that you move out with a roommate when you get a new job and your total fixed expenses add up to $1,600 a month, which includes your $1,000 portion of rent and $200 per month to OSAP minimum payment.

Step 2: Tally up your monthly spending money

Be realistic. The biggest mistake people make is being unrealistic when predicting their spending money. Assuming that you will be on your best spending behaviour for the next several years is dangerous. Yes, you may vow to bring your lunch every day and make your own coffee, but it’s very likely that eventually you’ll grab takeout and get a latte on the way to work and wind up overspending. If you haven’t planned for this, overspending lands right on a credit card. Plan for a relatively normal life. Add up all your discretionary spending. Things like groceries, takeout, entertainment, clothes, media, pet food – you know, your life. For our example, let’s say this adds up to $900 a month.

Step 3: Estimate your annual spikes in spending

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Not all of your spending money is going to be monthly. Some will happen once a year, in big spikes. Things like trips, a wedding, the holidays, winter tires, etc. These expenses can wreak havoc on the best of budgets if they aren’t planned for. I always suggest putting a bit of money aside for these. For our example, let’s pretend you have a trip next year and it will cost $1,200. You need to put $100 a month aside.

Step 4: Tally up your savings

You’ll need some extra money to put toward savings if you want to pay down your student loan and stash some money in your nest egg. There is no “magic amount” to put in here when calculating your income needs for your first job. It would be amazing to be able to save a ton of money, but with your first job ever, that could be a tall order. If we assume that you want to be debt-free in approximately five years, you’d have to put an additional $200 to your OSAP, making the entire monthly payment $400 a month. Obviously it would be amazing if you could save much more than this. But, you are young with your whole life ahead of you for saving, so it’s okay to focus on one savings goal such as debt repayment.

Step 5: Add them all together to get your monthly after-tax income needs.

This gives you your after-tax monthly needs from your job:

$1,600 (fixed expenses) + $900 (spending money) + $100 (extra spending money) + $200 (additional OSAP payment) = $2,800 a month. This is $33,600 a year, after tax.

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Step 6: Use an online tax estimator like to see what income you need before tax.

You need to figure out what salary from employment would give you approximately $33,600 a year after tax. According to this online calculator, this would be an income of approximately $42,000 a year before taxes and deductions.

There you have it! This is approximately the income you need to float your life, move out (with a roomie) and pay off your debt within five years. Lots will change for you over time and you could be looking at much different numbers even one or two years from now. This number is powerful today as it allows you to know when you can say “heck yes” to a job offer and when to say “heck no.”

Are you a millennial with a money question? Send it to us.

You can also join the Gen Y Money Facebook group.

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