There’s a lot to think about after you graduate from college. Your life is changing completely. You’re starting a new job and maybe moving to a new city. In all that excitement, it’s still important to keep a close eye on your finances.
Look for Ways to Save Money
You may feel like you suddenly have more money than ever before, or you might be struggling to cover all of your expenses. In either situation, it’s important to look for ways to spend less money, particularly since you are probably just starting to get a handle on your financial independence.
It’s a good idea to try to track your spending so that you know where your money is going, and then you can create a budget. In addition to taking steps to be frugal, you can look at how to reduce your bills. This is also a good time to consider whether refinancing student loans would save you money. It’s easy to find out if you are eligible for a refinance and how much it would save you.
Start an Emergency Savings Fund
Many people are financially derailed by a relatively small incident, such as needing money for a car repair. Others face bigger challenges, such as job loss. To ensure that you can weather these types of situations, one of your top financial priorities should be to create an emergency fund where you’ll eventually stash enough to cover expenses for three months or more. Some keep enough for six months or even longer. It all depends on your needs, your comfort level and your employment situation. If you are self-employed, you may want more money available in savings.
Control Credit Card Use
It can be tempting to go a little crazy with the credit cards at first. After all, there’s probably plenty of items that you need to get set up in your new home, and with a steady paycheck, it seems like it will be easy enough to pay it all off. You might also tell yourself that thanks to offers of cash back and air miles, you’re actually making a smart financial choice.
However, you should be careful. Interest rates for credit cards tend to be very high, and it can be easy to get deep into debt. There’s nothing wrong with using credit cards to build your credit rating or get miles or other points, but the key is that you need to pay off the balance each month. Don’t use them to live beyond your means.
Understand Your Benefits
Your new job has probably given you a lot of confusing material to read over concerning your benefits, particularly regarding healthcare and retirement savings. It’s important that you fully understand all of your benefits, including what your financial obligations are as far as your health care goes and how to access doctors who are part of your plan.
As for your retirement savings, you should start contributing. If you have a choice of plans, as a younger person, you can generally afford a higher risk portfolio, but you can talk to a financial professional to figure out what’s right for you.