Financial Tips for College Graduates

Stepping into the full-time workforce after years of academic life can be a shock to the system, especially when it comes to keeping track of all your financial responsibilities. If you’re a recent college grad and need some guidance on how to manage your money, here are some tips you can keep in your back pocket as you begin your transition into adulthood.

Tip 1: Calculate your cost of living to create a monthly budget

A budget is a great place to start, but before you dive right in, take the time to sit down and calculate your monthly cost of living. This will give you a baseline on how much you need to be earning every month to meet your needs. Make sure you’re putting together a comprehensive picture of what you spend your money on. This includes rent, utility bills, groceries, car payments or public transportation costs, pet care, gas, memberships and subscriptions, and so forth.

Once you have a good idea of what your cost of living looks like, create a budget that allocates money to each spending category. This way, you can have the peace of mind that you can cover all your needed expenses first. Knowing how much money you have left over from your needed expenses, you can add additional categories such as travel, dining out, gifts, or clothing. Building in a rewarding or fun category can really help, even if that means allocating $7 a week to that fancy coffee from a local coffee shop you love.

Tip 2: Pay down outstanding credit card debt

After you have a budget and an emergency fund in place, it’s time to tackle any outstanding credit card debt you may have. Assess how much credit card debt you owe in total and make a commitment to pay it off. If you have multiple credit cards, determine which cards have the highest interest rates and pay those off first.

To stay on top of interest, submit payments in a timely manner. To make the process even easier, you can automate your payments.

Tip 3: Create a plan for paying off student loan debt

While it might feel like the ink on your diploma is still drying, it’s never too early to start thinking about your plan to pay off your student loans. If you have federal loans, you’ll want to make sure you have access to your Federal Student Aid account to see what you owe and explore repayment plans you may be eligible for.

While government policies may shift and rules around loan repayment may change, it’s important to stay on top of what you owe. It may be tempting to ignore those loans since you just got out of school, but staying on top of interest will pay off in the long run. Knowing your monthly payment is a great place to start and building that payment into your budget will help you fit that into your overall expenses.

Tip 4: Set up automatic savings for future goals

A dedicated savings account is a great way to save your money for longer term goals. A general rule of thumb is to save at least three months’ worth of expenses in your emergency fund. This will come in handy if you lose your job unexpectedly or experience an emergency expense. This is the kind of money that should be off limits unless you run into a rainy day or emergency.

If possible, putting aside a small portion of your paycheck each month into your savings account is great way to build that buffer money over time. If your paycheck is directly deposited into your account, you can look into depositing a percentage of your paycheck into your savings, while the bulk of your money goes to your checking for everyday expenses. This can be a reoccurring automatic transfer from your paycheck to your savings account so you don’t have to worry about it every two weeks.

Tip 5: Seek out employer benefits with 401k matching or student loan assistance

Still on the lookout for your first job out of school? Many people forget to investigate potential employers’ benefit packages. While this may not seem like the most exciting detail about a job, it’s important to provide stability for your everyday life. Do some research on your own when applying for jobs, and if you get an interview, make sure to follow up on the benefits they offer their employees. Do they offer affordable healthcare plans or 401k accounts?

Seeking out employers that offer 401k matching or student loan assistance programs can help you make the most of your dollars, especially when you’re just starting out in an entry-level position. And even if retirement feels light years away, it’s helpful to start contributing now. Your future self will thank you.

Tip 6: Keep exploring sound financial advice

Financial education will benefit you immensely if you choose to lean in and learn from industry experts. It’s important to cross-reference and choose trustworthy sources, though. Be wary of what TikTok might be trying to advise you on finances, as a lot of influencers may look like they know what they’re talking about, but in reality, are just trying to sell something.

Here are some helpful podcasts to continue your education journey:

• NPR’s Planet Money
• The Dave Ramsey Show
• How to Money

Final Thoughts

Remember that you are in control of your financial success. Find out what money management tools work best for you and build small, consistent habits into your daily routine that promote a healthy wallet. Starting out on your own as a young adult can feel like you’re juggling a lot of new things all at once, but rest assured you’re not on your own. Getting a handle on your finances after graduation is a huge step forward to a healthy financial future.