If you’re just out of college and either looking for a first job or (hopefully) starting your career in earnest, money can be a really tricky part of your life to figure out. If you’ve got your first career-path job, you’re likely making more than you ever have in your life; those first paychecks can sure feel like a game-changer.
And yet at the same time, you’re likely responsible for far more – financially – than ever before: you may be finding increased living expenses now that you’re living off-campus, you may need to relocate for work, and plenty of recent grads now have student loan debt to consider. So what are some financial tips for recent college graduates?
One of the single most important financial moves you can make once you graduate is to start saving. Your first saving priority should be to build up an emergency fund that can cover major unexpected expenses or cover your cost of living for at least a few months should something happen to your income. After that, you’ll want to set aside money into a retirement fund. Yes, that sounds so far off when you’re in your early 20s, but with the way compound interest works, saving even a small amount early on will pay off exponentially by the time you finally reach retirement – especially if your workplace offers matching contributions.
We understand fully that in today’s economy, it can be a tough sell recommending people start saving when they may be making barely enough money to pay the bills – and obviously you should be prioritizing paying your cost of living and paying down debts first and foremost. But if you can find $10 a week – or even $10 a month if that’s all you have! – to stick into an interest-bearing savings account, you’ll be well on your way towards a more financially stable future.
When you’re fresh out of college, budgeting can feel pretty easy – just check your bank account to make sure you’re bringing in more than you’re spending, and away you go! And especially if you have a new professional salary but not many new expenses (maybe you’re still driving your old college car, or sharing an apartment with roommates, or even living at home), it can be easy to forget to do even that.
But as “adult” expenses start to enter your life, and as you start saving for the future like we recommend above, creating proper budgeting habits will make your future so much easier. That’s why we recommend budgeting apps like the free Mint budget tracker or more powerful (but paid) options like You Need A Budget to help build these habits. With app- and browser-based budgeting software, you can quickly and easily build powerful budgeting processes without the need for old-fashioned pen and paper, and make sure that every dollar you bring in and every expense you need to cover is properly accounted for.
Okay, maybe “build your credit score” doesn’t sound like some super-secret life hack – but it’s one of the most common pieces of financial advice out there. For a college graduate, it’s also one of the most important. After all, as you enter the adult world, your credit score becomes a crucial part of your life. Car loans, mortgages, new credit cards – they all use your credit score to determine not just how much you pay over time and interest, but if you can get these loans at all. Wildly, even some employers will look at your credit score during the hiring process.
Fortunately, now’s a great time to start building your score. You may have zero credit history, and that’s okay – there are plenty of opportunities to start building credit, from entry-level credit cards targeted at new graduates, to even simple stuff like paying off bills on time. If you have a small credit history already, now’s the time to strengthen it: taking out a reasonable car loan, or opening a second line of credit that’s only used for small purchases and paid in-full each month, or increasing your credit limit without increasing your monthly usage; these are all ways to start bolstering your credit history.
Graduating college and being thrust into the working world is many peoples’ first real experience with serious financial planning, and it’s easy to get overwhelmed. But by following this advice and taking common-sense measures to protect your money and start building wealth, you can start getting really excited about your future rather than staying afraid of checking your bank statement.
And if you’re really looking to build your credit history as a new grad, small loans can be a great way to show your ability to manage and pay debt responsibly. At Spotloan, our simple online application process can help you qualify for the money you need, even if you have bad credit or need a same-day loan. All you have to do is go fill out our application to see if you qualify, and you could receive a decision within minutes. Fill out our application now!