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Post-Graduation Financial Tips

Author: Financial Success | Image: Financial Success

The ultimate goal of going to college is to graduate. While it may be exciting to receive the first job and heading out into the real world, there are many new financial aspects that it is also important to prepare for. Here are a few tips toward preparing for your financial future after you graduate:

  1. Create a budget
    1. The first important step toward financial health is to create a budget. After graduation, this process should be a bit clearer as you have more consistent paychecks and also more consistent expenses. Simply taking a look at your income and expenses can easily help you to prepare to know what you can afford. Creating a budget and sticking to it can help to alleviate stress when making financial decisions.
  2. Start an emergency fund
    1. Having an emergency fund is a key step toward strong financial health. It is generally key to save around 3-6 months of your normal expenses toward emergencies. With more consistent expenses coming up after graduation, it should be easier to calculate how much is reasonable to set aside for any unplanned life event that could occur.
  3. Prepare to Understand & Repay Loans:
    1. It is quite important to know what type of loans you are taking on when you need to begin repayment, and how much interest will accrue on your loans. Typically, students have a 6 month grace period after graduation before loan payments are required. This is a great time to repay a bit of interest or make smaller payments toward your loans to cut down on the cost for when you are required to repay. While it may seem a bit daunting, loan repayment can be adjusted to fit your needs, and can also help you build credit. In times of stress, it is important to remember that these loans were used as an investment in your future!
      1. Federal Loans – Subsidized and unsubsidized loans are funded by the U.S. government. You can find the name of your loan servicer in Accessplus under “Loan Pmt Estimate”. The Subsidized loans do not accrue interest while in school, but the unsubsidized loans do. It is important to know which types of loans that you have and how you plan to repay.
      2. Parent Plus Loans – Parent Plus loans are loans that can only be taken out in a parent’s name. It is a good idea to discuss with your parents who will be responsible for repaying these loans upon graduation so that you know what to prepare for.
  • Private Loans – Private loans can be taken out through almost any loan servicer. These loans may have different terms depending on who they are taken out with. It is a good idea to ask your private loan servicer about details including the grace period, interest rate, and required payment.
  1. Build Credit
    1. As you begin to work full-time, it is important to build credit if you have not already begun doing so. There are a few different ways that you can build credit. One is by taking out a credit card. By paying a credit card off in full each month, credit can quickly be built. Additionally, credit will be built as you begin to repay your loans.
  2. Consider Retirement Plans & Benefits
    1. When you begin looking for a job, it is also important to look within the offer at what the company provides for retirement and benefits. Many companies offer different retirement plans, and some even match employer contributions. This can be a crucial piece toward retirement saving, and it is a good idea to consider what is offered for retirement. Additionally, insurance costs can be quite substantial after graduation. It is also a good idea to consider what insurance and benefits a company may offer as this can help you save substantially when you begin working.

Written by Peer Educator, Kassadi H.