You finally got the degree. Now it’s time to manage your money!
College graduation marks the end of one chapter and the beginning of another. Gone are dorm rooms, endless student sessions, and asking your parents for money — hopefully. Now it’s time for your first full-time job and paycheck.
Managing finances after college can be a tricky task, especially if you’re doing it on your own for the first time. These four tips can help teach you or a recent college grad in your life how to master some of the basics.
1. Evaluate your checking and savings accounts
Student checking accounts offer great benefits, such as waived ATM and monthly service fees. Those perks may disappear for a recent college grad, though, making it an ideal time to review your options.
Most financial institutions offer a variety of accounts, so try to find one that will maximize the return on your money, and look for ways to minimize fees. A lot of checking accounts will waive monthly service fees if you set up direct deposit, for example.
Pro tip! At Clearview, we have plenty of checking account options for better managing your finances after college. We also have savings solutions to help your money grow!
2. Stay on top of student loans
Managing finances after college inevitably means beginning to pay back your student loans. In a recent article, NerdWallet analysis estimates a student depending wholly on loans could amass about $36,700 in student loan debt in a five-year bachelor’s degree pursuit.
Having that amount of debt looming over you can feel overwhelming. However, understanding what you owe, to whom you owe it to, and what your repayment options are can help make paying off your loans seem a little less daunting.
Pro tip! Another way a recent college grad can stay ahead of student loans is by setting up automatic payments to help ensure you never miss a due date.
3. Start saving for retirement
As a recent college grad, you’ll find that full-time employment can come with a lot of benefits. One many employers offer is a 401(k), where companies will match a portion of what you put in, giving you free money toward your retirement. Since it’s a pretax plan, putting money in reduces the amount you’re taxed on each paycheck. This isn’t your only option, though. Traditional and Roth IRAs can also come with tax benefits and may be a great option to save for the future.
Pro tip! Remember that contributing money to your retirement now, even just a small percentage, can build upon itself over time.
4. Use credit wisely
When managing finances after college, it’s essential to understand the power your credit score has on your financial life. A good credit score can save you thousands of dollars in interest on mortgages and auto loans down the line. One way to build your score is to open a credit card and using it responsibly.
Pro tip! Look for cards with low fees, interest rates, and even rewards like our Premium World® Mastercard®. Avoid applying for multiple cards at once, as this can harm your credit rather than help it. If you open a card, try to use it only for essentials, and pay your balance in full each month to avoid interest charges. Failing to do so can also hurt your credit.
Following these tips can prepare you for managing finances after college and set you up for success in your 30s, 40s, and beyond. And remember, recent college grad – you got this!