SMART FINANCIAL MOVES FOR COLLEGE GRADS
For many young people graduating from college and getting that first “real” job also means finally cutting financial ties with mom and dad. The transition can be quite a shock going from a dorm or apartment paid for by your parents and a campus meal plan to paying bills and making your own dinner. This can be a time in a person’s life where they get started on the right financial footing or end up creating financial problems that will haunt them for years. The habits you adopt now may be an indicator of your long term financial success. Here are some tips how the college grad or any young person just starting out can get on the path to financial success.
Use a spending plan for your money.
For many people their first job post-college will also come with their first “grown-up” paycheck. While you may be heady with the thought of all the things you can now buy you need to take a step back and come up with a spending plan for your money. Why a spending plan (aka budget)? If you are out on your own for the first time you will likely have a lot more bills than you were used to in college: health, auto and renters insurance, water bills, cable, internet and groceries just to name a few. In addition to bills there will be the money you are spending on coffee, lunch and dinner out and happy hours. All these things add up quickly and can exhaust your bank account balance in no time if they aren’t controlled. Many people are also guilty of “rapid lifestyle inflation” buying all the things you think you should have, the new car, new TV, furniture and clothes. Remember you have a life time to accumulate all your stuff.
Pay yourself first.
Start a savings habit now! This is one of the best things you can do for yourself financially. At some point in life your rainy day will arrive and you will need money for an emergency, start saving now! Start with a goal of having $1,000 in your account and then work towards 3-6 months living expenses.
Build your credit slowly and wisely.
Recent college grads are especially susceptible to over using credit as a way to live a lifestyle they really can’t afford. Remember credit is not a right, it is a privilege and if you abuse it, you will find it’s hard to get or you will be charged enormous amounts of interest. If you use credit wisely it can be a tool to help your achieve your financial goals.
Think about your financial future.
Even though you just graduated from college, now is the time to start thinking about when you won’t be working. Because of the power of compounding interest, the sooner you start the better.
Calculators & Additonal Resources
- Visit PalmettoCitizens.org for a quick refresher on managing your checking account. While you are there you can find links to all our financial calculators and tools to help you better manage your money. Use the checking account reconciliation form to help you balance your checking account.
- Working on paying off your debts with the debt snowball? You can use the Accelerated Debt Payoff Calculator to get you started and see how long it will take to be debt free.
- See how long it will take you to achieve your savings goal with the Savings Goal Calculator.
- Unsure how much you should be saving for retirement? Check out the Retirement Savings Calculator.
- Get a free annual copy of your credit report at www.annualcreditreport.com.
- For more information on credit scoring or to buy your credit score www.myfico.com.
MoneyWACH is a partnership between Palmetto Citizens Federal Credit Union and WACH FOX focused on financial education in the Midlands. Over the course of the year we'll cover financial and economic topics that matter to you. The segment airs the first Monday of every month on Good Day Columbia and will also be archived here for your convenience. Achieve your potential with Palmetto Citizens Federal Credit Union and WACH FOX.
