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Nine Steps to Financial Success for New Grads
The financial decisions you make immediately after college graduation will have a big impact on your future. Here are nine steps to take to make sure you're headed in the right direction.
1. Match cash income and outflow
List all debts and expected expenses and then make a budget. Get into the habit of saving money regularly; using direct deposit and payroll deduction can put savings on autopilot.
2. Start paying off student loans
Figure out how much you owe and how much you can afford to pay each month. Lenders recommend payments not exceed 8% to 10% of gross monthly income.
3. Manage credit card debt
Pay off outstanding debt and make subsequent payments on time. That way, you can build a good track record to qualify for the best mortgage rates by the time you're ready to make a down payment on a house or condo. Learn how to improve and maintain a healthy credit score.
4. Start a money management system
Track all expenses. Click here to get started.
5. Decide where to live
Housing likely will be your biggest expense so make sure you can afford the monthly payments. Consider finding a roommate.
6. Decide if a new car is feasible
Make sure you can afford the payments as well as the high-priced car insurance as a single in your 20s.
7. Start saving for retirement
Invest in your company's 401(k) retirement plan as soon as possible. The employer's matching contribution is like getting free money. Find out more here.
8. Don't stop educating yourself
Subscribe to local or national newspapers and magazines and stay informed.
9. Set goals
Make a list of goals you want to reach within the first six months after graduating. Measure achievements along the way, and change goals as your career advances. And remember, we're here to provide the services and support you need, as you get started and as you move through your life.