Best money management tips for new graduates

If you’re about to graduate, there are some important tips that you need to know if you wish to improve your finances. These advices will also help you later in life.

When you’re in college it’s the moment of transitioning from the life of a child into the adult’s world. Among other things, this includes learning how to manage your finances. The more you learn at this point in life, the better you’ll do in the future if you keep following these financial tips.

1. Create a budget

A budget is a key element in everyone’s life, whatever’s the point they’re at. You can learn how to create a family budget, budget-friendly summer plans, or even a budget for dates. In each case, it’s all about setting a fixed amount of money for your spendings and sticking to it. If you wish to lower your student debt, you should think about creating a budget right now.

2. Research your options

It’s always necessary to check all options before making a purchase. Whether it’s buying a car, choosing a brand of clothing, or taking out a loan, you should do your research beforehand. For instance, you need to understand what’s what in student loan debt before signing your agreement. Nowadays, it’s not hard to see what different companies have to offer for the same amount of money, or how much they charge for a certain product or service. You can do most of it online!

3. Benefit from discounts

There are many ways to lower the price of a product or service, and one of them is looking for discounts. If you dig in a little bit, you’ll find coupons, hot sales, and rewards in almost every company. With just a little planning you can make the most of them and save a lot of money in the process!

Read this article on how to become an Extreme Couponer!

4. Build a solid credit history

A good credit score may not seem as necessary now, but it can help you a lot in the future. It’s a great idea to start building it while you’re in college when you can take Student Credit Cards and benefit from their rewards. Here’s more information on what you should consider when building good credit from scratch!

5. Avoid theft

This often goes unsaid, but it doesn’t do any harm to clarify it: identity theft can have big, negative impacts on your finances and you should take all needed precautions to avoid it. If you’re online banking, here’s how to stay safe while at it. If not, you can still protect your identity by being extra careful with how, where, and with whom you share your information.

Read this article to find out 5 keys to protect your personal data!

How to get started with money management if you are a recent college grad

Facing and managing debt after college can be sudden and overwhelming, If you have recently graduated from college or are close to doing so, here’s a checklist to get you started with your money management.  

Knowing how to manage your money as a recent college graduate is more important than ever. Becoming a young (probably financially independent) young adult may be a difficult thing to do. The sooner you put your finances in order, the sooner you can focus on living your life! 

Here’s a post-graduation checklist you can follow to properly manage your money from the start.

1. Set up a student loan repayment plan

Make sure you know about all of your student loans: how many you have, how to pay them, when and what amounts you need to pay, and the interest rates on each. Once you’re clear on this you can set up a system to make paying your loans easier.

•    Make sure you’re setting aside enough money every month for monthly minimum payments or more if you can afford it. Higher payments on your student loan now, for example,  will save you money down the road.

•    If you have a regular income, you can set up automatic payments. 

•    Mark your calendar as a reminder to pay each month, even if you have automatic payments set up. This way you can check your bank account on time, to see that there has been no mistake.

2. Set a monthly budget

If you paid your own way through school, you probably already have a budget for your monthly expenses. But, even then,  this may be the first time you’ll be responsible for all of your own expenses. For other recent grads, this may be the first time the need to budget.

Either way, after this big life change, you’ll want to revisit your budget. Your spending categories from college might grow or be replaced by new expenses.  Your income will probably be new too. 

You’ll need to create a budget that takes all these changing things into account: your student loan debt, monthly income, and your living expenses (plus any savings goals you have)

3. Slowly build up some emergency savings

Life is what happens while you’re busy making other plans, so be prepared for unexpected things to happen. Having an emergency fund is always a good idea to avoid financial trouble later on.

4. Start saving for other goals

After setting up a budget, making a solid debt repayment plan, starting to build up your emergency savings, it’s time to think about the things you want to do with your money. 

These can be short-term, like a new rug or sofa for your apartment, or longer-term, like a home of your own! Whatever your goals are, having a purpose always makes saving easier and gives you motivation. 

Botton line:

Becoming a young, financially independent young adult may be a bit scary, but go through this checklist to set up a strong foundation with your personal finances! 

How new college grads can build credit

If you can take a second to plan ahead, an early start at building your credit record is important because it can help unlock your future financial goals more easily

You’ll need good credit when you go to apply for a credit card, car loan, or mortgage later on, but luckily, building your credit isn't as hard as it sounds. 

Here are the six best things you can do now to start.

1. Apply for a credit card

This might sound strange, applying for a credit card, and using it wisely is the fastest way to start building credit. FICO, the credit scoring model that most lenders use, weighs revolving credit such as credit cards heavier than installment loans such as your student loans.

2. Don’t miss a bill payment

Your payment history makes up 35 percent of your credit score. It's the single biggest factor that makes up your score. Even one late payment can drop your credit score, and when it's on your report, it takes a full seven years to fall off. 

3. Avoid accumulating credit card debt

Your credit utilization ratio — the amount you owe versus the amount of available credit you have — makes up 30 percent of your FICO score. It's the second-most important factor in your score, so it is important to take care of not falling into debt.

When you do use your credit card, aim to pay your credit card bill in full every month so you can avoid paying interests

4. Don’t close any student credit cards you may have

If you have used your credit card properly, it is a good idea to hang onto the student credit card or speak with your credit card company about having it converted into a non-student version. This way, you can keep your credit history open and growing with this particular card. The length of your credit history makes up 15 percent of your credit score. 

5. Pay down your student loans

Once you start earning money, paying down your student loans can boost your credit score. The more you pay off, the more of a benefit you'll see, and if you pay extra on your student loans, you'll pay less interest overall and be free of the debt sooner. 

6. Check your credit report for mistakes

Errors on your credit report might affect your credit scores negatively, so it's especially important to stay on top of checking your credit report.

You can get a free copy of your credit report from each of the three agencies once a year.

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