This article is provided and sponsored by:
ClearPoint Credit Counseling Solutions
Graduating from college is a major milestone in a person’s life. It is a time for congratulations and celebrations. New adventures await you! So do real-world responsibilities.
Whether you’re headed to graduate school or a full-time job, personal finances will play a key role in your life. And with the student loan burden many graduates face, you likely already have loads of debt to pay back to lenders. It’s important to understand the importance of money management. While money doesn’t guarantee happiness, proper money management can prevent a lot of unhappiness.
Here are some tips that recent graduates should follow:
- Develop a budget. Budgets aren’t just for people your parents’ age. An organized budget plan will help you stay within your spending limits. Track regular monthly expenses, such as rent, utilities, car payments, insurance, credit card bills, and student loan payments. This is particularly easy to do if you bank online or use personal finance software.
- Share the burden. Get a roommate to reduce your rent and utility expenses, leaving more money for discretionary spending and savings.
- Pay off your debt. If you left college with credit card debt, make it a high priority. Those interest rates will cost you a lot over time. Determine how much money you owe in total, when payments are due, and what your finance charges are. Commit to making all payments on time, and pay more than the minimum payment whenever possible. From there, take care of your student loans and other debts, prioritizing by interest rate.
- Protect your financial information. Keep a close watch on your personal financial information. Protect against identity thieves by shredding your account statements, receipts, bills and other personal financial information before discarding. Protect your Social Security number, PINs and passwords from the eyes of strangers, roommates and anyone else who may have entry to your home or wallet. It’s a good idea to check your credit report periodically to detect any errors. You are entitled to a free copy of your credit report each year from the three major credit bureaus.
- Hold off on major purchases. Refrain from making any major purchases until you spend a few months living on your paycheck. Know how much money you need for rent, utilities, food and other necessities before adding a new expense.
- Save for a rainy day. Contribute to a savings account every month and make it part of your budget plan. A solid savings plan will help you handle future emergency expenses without having to use a credit card. It will also help you save for longer-term goals like buying a house or car, or going to graduate school.
- Take advantage of employee benefit plans. Your company may offer an affordable health insurance or a health care spending account that carries over from year to year. If your employer sponsors a 401(k) retirement savings plan, consider participating, particularly if the company matches employee contributions.
- Don’t hesitate to consult a professional. It’s not unusual for recent graduates to need help with creating a budget, reviewing their credit report, and making a plan to pay off student loans. A nonprofit student loan counseling agency and credit counseling agency, like ClearPoint, can help.
Consider talking to a nonprofit student loan counselor who can help you maximize your budget and determine which repayment plans might be best for you. Learn about various government programs along with the best strategies to pay off your loans. Learn more about student loan counseling.