Moving on from college is an exciting life event—and it’s also a time when money management may become a little trickier. From saving to credit to planning for emergencies, here are twelve financial tips for new grads.
Set Achievable Goals – Financial planning always feels more fulfilling when you’re working toward a goal. Choose an achievable aim (such as making loan payments on time, sticking to a budget or saving for a small treat) and let that be the guiding light in your first post-grad budgeting endeavors.
Understand Loan Repayment Options – If you’re paying off student loans, talk to your servicing officer about what kinds of payment plans are available. With their help, you can decide how to prioritize timing and interest payments to ensure you’re on a repayment schedule that works for your post-grad life.
Know Your Worth – As a new grad, you might be tempted to accept the first job offer than comes along. Depending on the offer, consider negotiating: whether that’s for higher pay, more flexible working hours, or additional benefits such as training or tuition reimbursement for further industry education.
Open an Individual Retirement Account – An Individual Retirement Account (IRA) is a tax-advantaged place to put savings or investments, so you can plan for the future while reducing your tax burden. Open the account now, even if you don’t reach the full contribution level for a few years.
Monitor Your Credit Score – If you don’t know your credit score, now is the time to find out. Maintaining a higher score helps you access various financial products at a lower cost, and may play a role in your ability to get an apartment or even a job. You can check your score for free on a recent credit card statement or through a consumer reporting agency.
Learn to Live on Less – When you live without your means, you can save more money and you’re less likely to take on high-interest debt from credit cards, personal loans or auto loans. Shopping secondhand, avoiding impulse buys and cutting out online shopping can help.
Plan for Expenses – The simplest financial advice can be the trickiest to execute, but the fact is: the journey to financial health necessitates building a budget. When you place ahead for expenses, you can divert earnings toward the essentials and toward savings in order to meet your goals sooner.
Avoid High-Interest Debt – High-interest debt makes everything more expensive; and every month you don’t pay it back, you’re increasing the amount of interest owed. Pay your credit card balance statement in full every month and avoid high-interest loans, particularly from unofficial or “payday” lenders.
Earn More on Your Savings – Many new grads aren’t ready to start investing, but they’d like their savings to offer more. Enter the high-yield savings account: where money can earn more interest than it would in a typical account, while still keeping funds liquid and accessible for withdrawal as needed.
Keep up With Bills – From utilities to credit cards to student loans, one missed payment can have a big impact on your credit score. If you’re unable to pay a bill, contact the creditor or other company to explain the situation and learn about your options. It may be possible to skip a payment or create an alternate repayment plan.
Shop Around for the Best Insurance – Don’t stick with an auto or renters insurance just because it’s what you’ve always used. Instead, shop around for the best prices and benefits. This is especially necessary if your current bill suddenly goes up without warning.
Get the Most From Workplace Benefits – Many workplaces offer additional benefits, but employees often don’t take advantage of them. Look into 401(k) matching, which can get you more retirement funds from the employer if you throw in some money, too.