Financial Tips For College Grads
Graduating from college is a huge moment in a young adult’s life. It often represents that final leap from semi-independence to being a real-life grown up.
It may not be the most exhilarating topic, but post-graduation finances need to be addressed sooner rather than later. Here are some financial tips for those newly-minted college graduates who are about to step into the real world.
Take advantage of employer 401(k) matching program. Some employers have an incentive program to help you save for retirement. They will match a certain percentage of the amount you have taken out of each paycheck for your 401(k) plan. For example, some employers will match 50% of your 401k contributions up to 6%. That is essentially guaranteeing a 50% return on your own investment! Regardless of how the matching plan is structured, try to take advantage of it.
Buy a used car. Don’t weigh yourself down with a big monthly car payment right out of college. There will be plenty of time to buy a new car later on when you decide you can really afford it. Instead, find a used car with a good reliability record and have it checked by a mechanic before you buy it. There are many online resources to help you decide what cars to buy and how much they are actually worth on the used market.
Start an emergency fund. There are few things that will help you sleep better at night than knowing you have enough cash on hand to deal with unexpected events. Try to build a fund that covers six month’s worth of expenses (rent, utilities, food, etc), then be consistent about contributing to the fund until you reach your goal. Even smaller contributions can add up over time.
Become a smart shopper. Comparison shop before making a big purchase, and consider buying used items when it makes sense. There are numerous websites that can yield great savings on both new and used items. Search for a good thrift store that has some real bargains on everything from furniture to electronics, and visit your local library to see what books, CDs and DVDs they have that you can check out for free.
Make nutritious meals at home. Not only will you save money by not eating out all the time, you can eat healthier and develop good nutritional habits. Smart health habits now could pay big financial dividends down the road.
Get a roommate. In addition to sharing the rent, you can also save on other monthly expenses such as cable and utilities. You may even find that having roommates is a lot more fun than living alone.
The diligence and self-control required to build good financial habits right out of school seems difficult, but they will pay off in the future.
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