Whether you’re still in school, just recently graduated, or have started your career, it’s always important to have your finances in order. Doing so will give you a greater peace of mind and give you more opportunities in the future. Read on for seven of our best money management tips for college grads.
Create a budget
It’s good to know how much money you can afford to spend and save each month, especially if you have student loans that you need to start paying on. Planning and monitoring your budget will help you identify things you may be wasting your money on, adapt quickly as your financial situation changes, and pursue your financial goals.
Limit your visits to fast food joints
Making a lot of visits to your favorite drive-thru? Try cooking at home instead. Doing so could save you a surprising amount of money, and the food will most likely be healthier, too — that’s a win-win.
If you don’t already have a home of your own, you might want one in the future, and a down payment is definitely more than pocket change. When you land your first full-time job, it’s a good idea to set up an automatic transfer to your savings account when you get paid — that way, you’re saving without even thinking about it, and you won’t be as tempted to spend those extra dollars.
Set aside some money for an emergency fund
You never know when disaster may strike, such as your car breaking down, a major dental expense, or medical bills. That’s why it’s smart to start building your emergency fund, with the goal of saving three to six months’ worth of income for those unexpected events.
Build your credit…
If you’re just starting to build your credit, a secured card is a good choice because you’ll qualify regardless of your credit history. You could also ask a close friend or family member if they’d be willing to add you as an authorized signer on their credit card or if they’d co-sign on a credit card or loan for you. Another way to build credit is by simply paying your bills on time. Your score can drop if you make late payments regularly.
…but don’t max out your credit card
If you’re able, try to use only 30% of your available credit. This looks good to creditors because it shows that you can use credit wisely without becoming overly dependent on it.
Take advantage of your employer’s 401(k) retirement plan
There is no reason to pass up free money! If your full-time gig offers a 401(k) plan as a benefit, it’s smart to contribute as much as you can, ideally at least enough to get the maximum employer match.
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