Financial Tips To Start As a New College Graduate
May 15, 2017 : Allie Freeland – Contributing Editor
You may have a pipe dream of lining up a high-paying job right after graduating from college. In this day in age, recent college graduates don’t always immediately swoop into their dream career. Pair that with starting to pay back student loans, and you have to face some very real financial situations.
As you plunge into “adulting”, take the time to change your perspective on finances. This means getting educated on becoming financially secure. Here are a couple of helpful money post-graduation tips to help you save and prosper in the future:
1 – Update Your Billing Address:
Think of all the places you have given your address to: bank statements, cell phone statement, student loans, and credit card statements, and other reoccurring payments. While you may overlook this small task, you don’t want to miss it because a missed payment could affect your credit score down the line!
2 – Review Your Credit Cards:
After graduating, you may want to beef up your wallet with more credit cards. While it may seem like something you should avoid, it’s actually not a bad idea to think about adding a card to your wallet because you can start building your credit history. Credit is used for things like mortgage loans, car loans, or opening financial accounts. In the more near-term, a landlord might even pull your credit history to gauge your financial responsibility! The Forbes piece “7 Credit Cards for Recent College Grads” offers good guidance on the best cards for recent college grads.
3 – Move Back in With Your Parents:
While it might seem a little regressive to move back in with your parents, your bank account will thank you. You can save on common expenses like groceries, utilities, and an apartment lease, Consider this: You could even start a business while living with your parents.
4 – Get Insured:
Did you know if you do not hold health insurance, you may owe a penalty to the federal government? While many recent grads are covered by their parents’ health insurance until 25, not all plans cover dependents in their 20s. You can opt for Marketplace insurance, or check with your alumni office for short-term insurance offerings. For more information, check out our resources on health insurance on Block Talk.
5 – Get Back to Basics:
Most of us spend money on unnecessary things. To nix this habit consider your “wants” versus “needs”. Remember, your financial obligations are real and present, so did you really need that new t-shirt of tech gadget? Or, do you need to eat out all the time or could you sacrifice some meals and make food at home? If it’s not groceries, medicine, toiletries, utilities, gas, or other essentials, Don’t buy it! Make a personal effort to quit the little luxuries you may have enjoyed while in school cold turkey, down to the basics.
6 – A Minimum-Wage Job Is Better Than Nothing:
Don’t expect to get a high-paying job in your chosen career field right off the bat. This may be the biggest reality check for new graduates. If the only thing you can find is a job as a barista and your bills are piling up, take the gig. You can still use your downtime to search for your ideal job. Every little bit helps and it will, in time, accumulate if one keeps saving.
7 – Understand your Student Loan Obligation
In your post-college student loan journey, you’ll need to develop a repayment plan. To start, you can complete an exit interview if you’re on federal financial aid. This can often be done on your computer and involves gaining insight into when your payments will be due and what your repayment options are. You may opt for a:
- Standard Repayment Plan
- Graduated Repayment Plan
- Extended Repayment Plan
- Revised Pay As You Earn Repayment Plan (REPAYE)
- Pay As You Earn Repayment Plan (PAYE)
- Income-Based Repayment Plan (IBR)
- Income-Contingent Repayment Plan (ICR)
- Income-Sensitive Repayment Plan
Read up on your Federal Student Aid repayment options. and if you feel overwhelmed, consult your alma mater’s financial aid department for guidance.
What’s your advice to the class of 2017? Share some of your money-saving strategies on our H&R Block Facebook page!