7 Savvy Money Tips for New College Grads

For most college students, graduation marks the much-anticipated transition into adulthood. So, if you’re preparing to get your diploma soon, that means getting a grown-up job and taking on your own personal finance management.

Here are a few money tips to keep you focused on financial success while staying out of debt:

1. Financial planning isn’t one-size-fits-all.

   Don’t adopt a strategy just because it worked for someone else. Invest time in learning basic financial principles—like spending less than you earn and saving for unexpected expenses. Fine-tuning these principles will help you make educated choices about what’s right for your situation.

2. When it comes to money, time is your greatest ally.

   Retirement may seem like eons away, but the best time to start saving for retirement is now! The more time your money has to earn interest, the less money you’ll have to contribute out of your pocket—and the more comfortably you’ll be able to retire when the time is right. Even if it’s just $50 per month, start contributing regularly to a 401(k) or other retirement account.

3. Focus on saving more.

   Saving isn’t just for retirement funds! Now is a great time to create secondary savings accounts for your short- and long-term financial goals and unplanned expenses. Want to buy a new car next year or travel before you settle down? Start a savings account, name it for the specific item you’re saving for and add funds monthly or with each paycheck. That way, you’ll easily be able to see how close you are to your goal, and it helps to keep you motivated.

   An emergency fund is something else all adults should have. The idea is to pay into this account over time, and then the money is there when you need it—like when you need a new set of tires or have an unexpected hospital stay.

4. Don’t keep up with the Joneses.

   The Money Professors—authors and financial literacy educators at East Carolina University—always ask their students if they think most people are financially successful. Overwhelmingly, the answer is no. “If most people aren’t financially successful, then it makes sense to stop doing what most people do,” they explain. “Just because everyone else is getting a new car every five years doesn’t mean you should.” Living by this time-tested principle can help you afford the things that really make a difference, like a house or college for your kids.

5. Discuss money with your friends and family.

   Light bulb moment … your finances play a role in every aspect of your life—from relationships to spirituality to health and more. Discussing financial goals with loved ones allows you to identify shared goals and differences to better support each other along the way.

6. Manage your debt wisely.

   It’s not unusual for graduates to have some debt. The key here is to deal with it now—don't put it off! Make eliminating your debt a priority by creating a payoff strategy and sticking to it. Paying down your credit card debt and getting rid of your active interest will not only improve your credit score, but it will also allow you to pocket more income as you start building your life. Good money habits now go a long way to reducing financial anxiety in the future—as you buy your first home, transition into a new career or approach retirement.

Talk with an expert.

You may think meeting with a financial professional is something you do only once you’ve amassed a significant amount of assets. A new college graduate may not necessarily fit that bill. “A financial professional can help you through a lot of financial firsts and help you avoid beginner mistakes,” says Chad Waddoups, vice president of wealth management at Mountain America Credit Union. “We’re also a great sounding board for long-term planning.”