Five Smart Money Moves For New College Grads

Congratulations, you graduated! Now that you’ve entered the post-college world you’re facing a myriad of decisions, the most challenging of which will be the stability of your financial outlook. That brings with it a range of responsibilities like paying bills, rent, car payments, and, if you’re one of the millions of graduates who took out student loans to help pay for your education, then you may already have some debt to clear.

But don’t despair, taking control of your finances early will help you succeed in the long run. Here are five of the best tips to follow as you venture away from the family nest towards growing a healthy financial nest egg of your own.

1. How’s Your Credit Score?

Remember that dreaded “permanent record” that followed you all the way through high school? Your credit score is the same thing, but this one can keep you from getting a loan, an apartment, even a job in some cases. Your credit score is the basis upon which lenders and other institutions will judge you. Having an excellent score will make life much easier when you want to finance a car or move into that awesome apartment with a great view. So it behooves you to keep it as high as you can; that means paying bills on time and refraining from owning too many credit cards.

2. Stay Out of Debt

The quickest way to ruin that credit score is by taking on too much debt. For those of you with considerable student loans hanging over your head, the first priority should be paying those off as quickly as possible, as they do affect your credit score. But if you are making the monthly payments on time, your score will not suffer. Some students may have more than one loan outstanding, so be sure to pay off the accounts with the highest interest rates first.

3. Time to Budget

Building a budget each month will help you manage your finances to ensure that you live within your means. That is one of the biggest causes of getting into serious debt, spending money quicker than it comes in. Most college grads, whether they pursued online teaching degrees or MBAs, mistakenly make lavish expenditures because they feel they deserve them for enduring four (or more) years of hard work. But don’t do it! Your rewards will come but spend wisely as you start out.

4. Establish a Cushion

So you’ve got that new job and the paycheck is making ends meet. Start squirreling some of it away now. Open a savings account or mutual fund (heck put it in a jar if you want) but begin building an emergency financial cushion immediately. Chances are you will be faced with some unexpected expenditure at the worst possible time and when that happens you’re stuck. It doesn’t have to be a lot, just a little something from your paycheck every month in a place that is easily accessible in case you lose your job, need to spring for a major car repair, or incur medical costs.

5. Get Educated About Your Finances

There are many terrific books out there to teach you about the basics of personal finance, without the dry, complicated jargon. Seek out a few and read them. You’re likely to find all of these tips, and many others, among their pages. I assure you, the more you learn now, the better equipped you’ll be later on for achieving financial security.

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