Five money tips for new college grads
Well, look at you all graduating! Congratulations on this amazing life event.
As we prepare for the next adventures in our lives, it’s a good time to take a few minutes and think about what we need to do to set ourselves up for financial success. Here are five smart moves to make now that we’re heading into “the real world.”
Live within our means.
Now is a good time to create a budget. It doesn’t have to be super fancy. Let’s see how much money we bring home after taxes, then figure out how much we can afford to spend each month while contributing to savings. Let’s identify the big things, like student loan payments, monthly rent, utilities, groceries, transportation expenses and car loans. Here's our easy 3-step guide on how to build a budget. And if you're still having troubles staying within your budget you should try these 3 easy budgeting ideas.
Pay bills on time.
Missed payments hurt! They can affect our credit score for years and make it more expensive for us to borrow money in the future. Let’s set up automatic payments for regular expenses like student loans, car payments and phone bills. Take advantage of any reminders or notification features.
We can also contact creditors and lenders to request a different monthly due date from the one provided by default (like switching from the 1st of the month to the 15th, for example.)
A credit card can be a sneaky little jerk
Understand the responsibilities and benefits of credit. Shop around for a card that best suits your needs, and spend only what you can afford to pay back. Credit is a great tool, but if we use it responsibly. If we’re charging nights on the town and eating out, without having the funds to pay it off in full, then we’re saddling ourselves with some major “downer debt.” Find out more about how underhanded that little credit card can be.
Plan for retirement.
We’re just starting out, but this is the best time for us to start saving for retirement. Contribute to retirement accounts like a Roth IRA or your employer’s 401(k), especially if there is a company match. We should aim to set aside enough to qualify for our employer’s full match – it’s free money that adds up to a significant nest egg over the years. Automatic retirement contributions quickly become part of our financial lifestyle without having to think about it. Here are some things you should know to save for retirement.
Become emergency proof.
Hardships can happen in a split second. But if we have an emergency fund, we’ll be ready for the speed bumps and detours ahead. Let’s do our best to set aside the equivalent of three to six months’ worth of living expenses. Start saving immediately, no matter how small the amount. And lets’ make saving a part of our lifestyle with automatic payroll deductions or automatic transfers from checking to savings. Emergency-proofing is all about buying ourselves a little freedom from worry. From stress. From anxiety.
For more on taking control of your money, get the Mastering Money ebook. And check out all the other tips and advice for taking control of your money.
Visit us at First Federal Bank and find out what Wellbeingville is all about! You can also take advantage of our free digital banking tools that let you check balances, pay bills, deposit checks, monitor transaction history and more.