8 Financial Tips for Recent College Graduates

10 must-dos every woman grad needs for financial success

I graduated from college eight years ago, and looking back, there are many things I wish I could have told my younger self.

Fresh out of college, I was eager and a bit scared, hoping to land a decent job. I had an English degree, no job prospects, and an impending economic crash. My bright college ambitions dimmed as reality set in that summer.

I made many of the same mistakes new graduates often do, and it’s painful to watch others make them too. I financed a car, moved into a more expensive apartment, and spent my money without a budget or much thought for the future. If I had money in my checking account, it was gone quickly, and I didn’t consider my finances beyond the next paycheck. I had no savings, no car of my own, and no understanding of IRAs or 401(k)s.

I had a lot to learn about managing money. Like many others, I learned the hard way. But you don’t have to make the same mistakes. Here are my top 8 financial tips for graduates:

1. DON’T BE ASHAMED TO GO HOME

If you need to move back in with your parents after graduation, don’t feel bad about it. Take advantage of the opportunity to save on rent, build an emergency fund, max out your new 401(k), or start paying down student loans. If your parents are okay with it, use this time to save as much as possible.

2. ASSESS YOUR STUDENT LOAN SITUATION

Unlike me, many graduates have student loans. Don’t ignore them. Calculate your total debt and figure out how to fit the payments into your budget. If you have multiple loans, consider refinancing or consolidating them to get a better interest rate or simplify your payments.

3. SHARPEN YOUR RESUME

Landing a job right out of college can be tough, but you likely have more experience than you realize. Highlight skills you gained through campus jobs, internships, tutoring, or volunteer work. These experiences are valuable and should be prominently featured on your resume.

4. CONTINUE LIVING LIKE A BROKE COLLEGE STUDENT

Keep your frugal habits to save money as you start your post-grad life. Avoid the urge to keep up with the Joneses. Congratulate coworkers on their new cars, but remind yourself that financial stability is more important than flashy purchases. Drive your old car or ride a bike and save that money instead.

5. START A BUDGET

When you get your first job, create a budget or at least track your spending. It’s important to understand your earning potential and avoid blowing your first few paychecks on unnecessary things. Use a budget to put your income to good use. There are many online resources to help you get started.

6. SAVE FOR THE FUTURE

This advice is repeated because it’s crucial: start saving for retirement as soon as possible. Open a 401(k) or IRA right after graduation. If your employer offers a match, contribute at least enough to get it. A company match is essentially free money and an immediate return on your investment. Use a compound interest calculator to see how much you can grow your savings over time. The sooner you start, the better.

7. DON’T SPEND YOUR PAYCHECK BEFORE YOU EARN IT

Avoid taking on consumer debt to maintain a certain lifestyle. Don’t finance items like cars, clothes, or electronics unless you can pay cash. If you can’t afford it now, don’t buy it. Future debt isn’t worth the short-term satisfaction of new purchases.

8. BE CAUTIOUS WITH CREDIT CARDS

Credit cards are not free money. Avoid using them unless you can pay off the balance in full each month. The long-term cost of carrying a balance is not worth it.

Congratulations to all new graduates! You’ve worked hard to get here. Now, take the time to establish good financial habits so you can control your finances rather than letting them control you. You’ll thank yourself in the future.

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