Financial Tips for Recent Graduates
After graduation comes an exciting new chapter full of possibilities and unknowns, some of which can impact you financially. Starting off on the right financial foot now will help prepare you for future financial needs later in life. These tips will help you as you navigate the transition to adulthood and financial independence.
Create a Budget & Stick to It
Your living and working situations have likely changed since graduating, and this can have a big impact on your budget. You can figure out where your current budget stands by determining your monthly income, then subtracting your monthly expenses. Staying on budget – or better yet, staying under budget – helps you make sure you can meet all of your expenses and even have a little left over. Include contributions to your emergency savings fund in your budget so you can make sure you’ll be able to take care of unexpected expenses when they inevitably happen.
Keep Living Expenses Low
You don’t want to spend all of your money on rent and utilities. Try to find housing accommodations that fit within your budget. Keep your mind open to more affordable communities rather than jumping at the nicest place you can find. Don’t rule out living with roommates either. It’s always nice to be able to split the costs where you can when you’re starting out on your own.
Build Credit
A good credit history will help you qualify for loans like credit cards and auto and home loans when the time comes, and even helps you qualify for renting a home or apartment. You can build good credit by keeping your debt low and always making your payments on time. To keep your credit score strong, avoid opening too many new loan or credit accounts within a short period of time. Also, think twice before closing any existing credit accounts, as the length of your credit history affects your score and a longer history can help boost your score.
Pay Off Debt
For recent college grads, student loans are often the largest debt. If you also have credit cards, that debt is likely a much higher interest rate, and with a lower balance. When working to pay off debt, focusing your efforts on your higher-interest debt first allows you to pay that debt off quicker so you have more money to put toward your other debts, like student loan payments.
Pay Off Debt
For recent college grads, student loans are often the largest debt. If you also have credit cards, that debt is likely a much higher interest rate, and with a lower balance. When working to pay off debt, focusing your efforts on your higher-interest debt first allows you to pay that debt off quicker so you have more money to put toward your other debts, like student loan payments.
When you start working, employee benefits can be your best friend. Benefits can offset insurance costs and help you start saving for retirement. Many employers offer matching contributions to your retirement account. If your employer offers this perk, contribute as much as you can so you are able to take full advantage of the match.
Invest in Your Career
Your first job after graduation is often just a stepping stone on your greater career path. If your next step is to land a better job or a bigger paycheck, it’s important to keep investing in yourself. Networking with other professionals in your industry or field of interest is a great way to build professional relationships that can help you navigate your next steps. You can join a professional organization for your industry or attend training and development workshops and other events. You can also take classes to help build and enhance your skillset. There are countless learning opportunities available these days, either through free or inexpensive online courses or through your community’s education programs.
Protect Your Finances
It’s important to take steps to protect your information and your finances to ensure no else is able to access your accounts or information. Follow best practices like using unique and secure login credentials for each account you access, and never sharing your credentials with anyone else, especially for your financial accounts. It’s also a good idea to regularly change your usernames and passwords for an added layer of protection.
At Robins Financial Credit Union, our mission is to enhance the financial well-being of our members and community. We honor this commitment by providing educational content to help you make the most of your finances. Read our other blog articles to help you gain the financial knowledge you need to succeed.