Financial Tips for College Graduates

How to manage your finances as you enter the working world

Financial Tips for College Graduates

Are you graduating this December? Ready for the real world and all the responsibility that comes with it? No worries most people aren’t, but here are some tips to help keep your finances in line and help you begin to build solid financial skills.

Nine out of 10 baby boomers provide their adult children with some kind of financial support, according to Nancy Anderson of While every parent wants to help their children succeed in life, it’s also important that parents don’t compromise their retirement savings in the process. (Let’s be real, you probably don’t want to be paying their expenses down the road so don’t spend their money now.)

So what do you do on the road to a solid financial education foundation?

    1. Understand the value of the dollar – Especially for college students who are eating at all hours of the day or night, being mindful of your spending is important. Instead of having that pizza delivered from down the road or buying three coffee drinks from the library cafe, try thinking ahead before an all-nighter of studying or in a couple months, of working; pack snacks that you already have on hand and bring a thermos of coffee. The small expenses can quickly add up to a big chunk out of your budget.
    2. Keep a good credit score – What’s a credit score? Basically an official record of how you handle your money in regard to paying your bills on time and the amount of debt you may owe. As you contemplate moving into the real world, there are things you’ll want to do that your credit score will have an impact on such as renting an apartment, buying a new car, etc. Sign up for a credit card with a low spending limit and set ground rules for yourself when it comes to using it to avoid getting yourself into trouble.
    3. Save, save, save – Yes, I know buying new work clothes, the latest tech gadgets and nice furniture for your grown up apartment all sound appealing, but getting into the habit of saving early on will be beneficial in the long run. Putting money into a savings account that you don’t touch is one of the key factors to success; the standard rule is to have approximately six months of expenses saved to ward against the unexpected. Your financial institution may offer the ability to auto-draft money from your checking to your savings account so you’re automatically saving money with each paycheck.

76 percent of Americans live paycheck to paycheck, according to research by; another study from CashNetUSA revealed that almost half of those surveyed had less than $800 saved for emergencies. Don’t fall into those statistics.

When it comes to learning more about managing your finances, you may come across terms that seem foreign and intimidating; however, taking some extra time to research these things now and understand how they can impact your financial future is important for your success.

“Young college graduates, who start saving now, can save far less money and be much wealthier [through compound interest] than Americans who realize in their 40s and 50s that they have to get busy stashing money away,” according to Lynn O’Shaunessey of Here are some more financial tips from O’Shaunessey:

    • Maximize your savings with compound interest – Even if you start your savings account with meager contributions each month, compound interest, like a snowball, can turn those contributions into something more significant as the years go on.
    • Open a Roth IRA – A Roth IRA is basically your retirement savings account; even though retirement may seem like decades away, you want to make sure that you’re comfortably prepared for it, so opening an IRA now will be sure to benefit you in the future.
    • Work on creating a stock portfolio – Investing in stocks can have a major impact on your finances and also teach you a lot about money as you become more experienced with the process. Start by investing in just one category while setting the goal to eventually spread your finances across large-cap and small-cap index funds, which will provide you with the best return for your investment.

Whatever you do, just don’t blow off your finances. Take the time to create a budget and understand where each dollar of your new working salary is going.

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