20 Best Financial Tips for Graduating College Students

Graduating from college is an exciting time for any student, but it can also be a stressful time when you start to think about your future. It’s important to make sure that you are taking care of yourself and your finances in the best way possible! This article offers 20 financial tips for graduating college students.

20 Best Financial Tips for Graduating College Students
  1. Establish a budget and stick to it. One of the most important things you can do as a graduating college student is to establish a budget and stick to it. This means knowing how much money you have coming in each month and dividing it up between necessary expenses (like rent, food, etc.) and discretionary expenses (like entertainment, clothing, etc.). It may be tough at first, but it’s important to be mindful of your spending and not overspend on unnecessary things.
  2. Start saving for retirement. It’s never too early to start saving for retirement! Many employers offer 401k plans that allow employees to save money pre-tax. This means you can save a lot of money each year without feeling the pinch. If your employer doesn’t offer a 401k plan, consider opening up an IRA account instead. Either way, it’s important to start saving as soon as possible so you can enjoy a comfortable retirement down the road.
  3. Invest in yourself.One of the smartest investments you can make is to invest in yourself. “More specifically, that means investing in your education and gaining more skills by going back to school or taking on-the-job training opportunities,” said Wills.
  4. Avoid incurring credit card debt at all costs. If you have a student loan already, it’s wise not to go into any additional debt for the next few years after college graduation. “It may be tempting to buy new furniture with your first big paycheck from work — but keep one thing in mind,” said Wizman of NerdWallet.”When interest rates are low like they are now, paying off debts early saves money .”
  5. Start building your credit history early. One way to establish a good credit score is to start using a credit card and paying off the balance in full every month. This will show lenders that you’re responsible with money and can be counted on to make payments on time.
  6. Make sure you have health insurance. It’s important for young people just starting their careers to have health insurance so they don’t rack up huge hospital bills if they get sick or injured. You may be able to stay on your parent’s plan until you turn 26, or find a policy through healthcare.gov.
  7. Get a car. Be sure to get comprehensive and collision coverage so you’re not stuck paying for the expenses if your vehicle is damaged in an accident, said Wills.
  8. Make saving money automatically. Set up automated transfers from checking into savings or other investment accounts, then never see that money again until it’s time to spend it on something special like retirement down the road. “Don’t even think about dipping into those funds — you’ll thank yourself later,” said Wizman of NerdWallet.
  9. Keep track of your spending habits with personal finance software such as Mint or You Need A Budget (YNAB). It will help you stay aware of how much cash is coming in each month and how much is going out.
  10. Don’t spend more than 30% on housing. One way to save money while living the good life post-college graduation is to avoid paying too high a rent for an apartment or home.” Spending less means that you can put away 20%-30% toward building wealth,” said Wizman of NerdWallet.”The best cities offer both low rents and plenty of jobs — find one near where you want to live .”
  11. Avoid bad debt. “If you’re in your 20s, there are lots of things that will tempt you to spend more than what’s in your bank account,” Wiz said. To stay afloat financially — and avoid landing in credit card debt or payday loan territory — don’t buy anything unless you have the cash for it.”
  12. Create a budget spreadsheet. Once upon a time, this was something only adults with jobs were expected to do. But now millennials have become accustomed to having their very own spreadsheets where they can list all monthly income sources, recurring expenses (rent/mortgage), non-recurring expenses (car insurance bills), and savings targets such as travel funds or retirement contributions.
  13. Save money on entertainment costs by subscribing to streaming services instead of cable TV.
  14. Invest money in a 401k or IRA account as soon as possible. Doing so will reduce your taxable income now and enable you to take advantage of compound interest growth down the road.
  15. Live with roommates. This is especially helpful if you’re just starting your career and don’t make much money yet. Not only will you save on rent, but you’ll also have someone to split other household bills with.
  16. Drink tap water instead of buying bottled water. It might not taste as good at first, but eventually, your tastebuds will adjust — and you’ll be doing something great for the environment too.
  17. Brown-bag your lunch instead of eating out. This is a great way to save money, and it’s also healthier for you because you can control the ingredients that go into your meal.
  18. Invest in energy-efficient appliances for your home. They might cost more upfront, but over time you’ll end up saving on your monthly energy bills.
  19. Live close to where you work or study. Not only will this save you money on transportation costs, but it will also allow you to walk or bike to nearby destinations instead of relying on cars all the time.
  20. Sell things that you don’t need anymore. Got a bunch of old clothes, books, DVDs, video games, or other items lying around? List them on Craigslist for sale to make some money.

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