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Money Management Tips for New Graduates

Tips to successful money management

1. Start saving

It might sound unrealistic with so many new expenses, but the earlier you start a savings plan the larger your retirement account can grow. Contribute to your employer’s 401(k), even if they don’t match your contribution. Ideally, college graduates should save ten percent of annual income.

2. Make a budget

Determine your essential expenses (rent, insurance, debt) each month and subtract them from your take home paycheck automatically. Then consider second-tier essentials (groceries, car expenses, professional attire, savings) and spend within your means. Finally, use whatever is left to enjoy the life you’re working so hard to create.

3. Manage debt wisely

Whether your debt comes from student loans, credit cards or both, managing it every month is the best way to address what you owe. Pay your highest-rate debt first. Credit cards often carry higher interest rates that student loans. Also, consider consolidating student loan debt, it can lower your monthly payment and it’s easier to manage one payment each month.

4. Know your credit score

A  poor credit score can affect your ability to rent an apartment, buy a car or land a great job. The best way to protect your score is to pay all of your bills on time. Set-up automatic payments for regular expenses like your utilities or cell phone bills. A late payment not only costs you additional fees, it lowers your credit score.

5. Get insured

You’re invincible, right? It might be tempting to save a couple bucks each month by skipping coverage, but don’t do it. If you’re a traditional-aged college graduate, you can stay on your parents’ health insurance plan until your 26th birthday. If you’re renting right after college, be sure to get renters’ insurance, it will cover the loss of your belongings in the event of a fire.