Table of Contents

If you’re a first-year college student, you might not yet be experiencing financial difficulties, but most students eventually do. Whether you’re a “traditional” college student who entered right out of high school or a “nontraditional” student who is going back to school, it makes no difference.

At some point in college, almost everyone experiences financial difficulties, which might affect your academic progress. Stress over money can make it difficult for you to focus on your schoolwork. Spending excessively can force you to work more hours than you otherwise would, which would leave you with less time for study.

You have incredible financial benefits if you recently graduated from college. There are actually solid ideas for everyone at every age, regardless of whether you want to begin your journey towards financial independence, land your dream job, or simply make more money.

However, if you’re under 25, time is your greatest financial edge of all. Additionally, try not to be too hard on yourself or lose hope. You learn how to live from experience.

Here are seven wise financial decisions to make before graduating from college:

Take into account these seven wise financial decisions that can put you ahead of the game as you approach college graduation and impending adult financial obligations. Before you cross that stage, one of the smartest decisions you can make is to set yourself up for financial success.

  • assemble your papers
  • Know your student loan obligations.
  • start establishing credit
  • start your job search
  • Locate a reasonably priced residence.
  • Save money now.
  • safeguarding your identity and online financial security

1. Assemble your papers

Make sure you obtain all relevant documentation from your parents if you are going to embark on a solo journey. Among them are items like your:

  • birth registration
  • Social Security number
  • Insurance cards (such as those for an automobile, health, and dental care)
  • vaccination history
  • diploma from high school

You’ll soon be in financial situations where you could need access to these papers, such as when you apply for credit cards, apartments, or fill out a W-4 at a new job. Your plans can be delayed if they are still packed up in your folks’ garage halfway across the country.

2. Recognise the specifics of your student loan repayment

You must prepare ready to begin debt repayment if you took out student loans. Even though most student loans come with a grace period, it’s crucial to comprehend the conditions of your repayment, the dates by which payments are due, the length of your grace period, and the minimum payments that must be made.

If you already have a repayment strategy in place, you could feel more assured. Also, think about paying off all unsubsidized loans’ interest right away. If at all possible, do it before to the end of your grace period to avoid having that sum added to your principal and raising your loan balance and payments.

3. Start establishing credit

By adding tradelines, or accounts, to your credit report, you can grow credit. These could be for credit cards, loans, or even utility bills. The three major national credit reporting companies, Experian, TransUnion, and Equifax, create credit reports.

If you have a student loan, you’ve probably already started the process of developing credit. If you don’t already have one, getting a credit card is a smart method to increase your credit mix and benefit from benefits.

You can accomplish additional financial objectives by building and keeping a solid credit history. Your credit record may occasionally be used to help you qualify for a flat or during the hiring process for particular sorts of jobs, and it may even be used to help you buy a car or a house in the future.

You might need to start your job search several months prior to graduation, depending on your financial position. As soon as feasible after graduation, this might help you secure employment and start earning money. While you’re still in university, think about using the career centre and other on-campus resources to polish your résumé.

According to the Bureau of Labour Statistics, the average period of unemployment is slightly over 20 weeks, so plan on your job search taking some time. Be prepared to apply early or to have the funds saved up to cover the time between graduating and landing a job.

5. Discover an Affordable Residence

If you believed that leaving your college flat or the dorms meant leaving your roommates behind, hold on. Living with roommates or family may be the only option for finding an affordable place to live immediately out of college.

However, this is a crucial financial tactic. Rent frequently consumes a sizable portion of your salary, and this proportion is typically bigger when you’re first starting out.

But according to experts, housing expenditures shouldn’t consume more than 30% of your monthly income for it to be truly reasonable. Consider living with friends or relatives if you can reduce your rent expenses to maximise your savings potential until you get back on your feet.

6. Commence saving

If you have the resources to begin saving money before graduating from college, do so. An independent grownup needs an emergency fund.

To start, aim for a realistic ballpark figure like $1,000. Then think about setting aside three to six months’ worth of post-graduation expenses. Be sure to account for living expenditures, phone bills, groceries, debt repayment minimums, and any other necessary charges. When an unforeseen expense, like a car repair, happens, having emergency reserves on hand will help you pay it off without going into debt. Just promise yourself not to touch it until absolutely necessary.

Once you’ve established a saving routine, consider creating a Roth IRA or high-yield savings account to store some additional cash. You can receive a nice return on your savings with the help of both types of accounts. While Roth IRAs are designed for retirement savings, high-yield accounts are better for short-term savings.

7. Ensure your identity and financial security online

Take efforts to safeguard your identity as you open more formal “adult” accounts, such as bank accounts and utility accounts. Use secure online habits like changing your passwords for each account and logging out of your financial accounts on applications.

When responding to advertisements for residences, exercise caution. Never be required to pay in advance for a location you haven’t visited. It’s crucial to become aware of fraud and scammers, as well as how to avoid them, as you manage more complex financial issues as an adult.

Get an education in personal finance.

The completion of college is a major turning point in the financial lives of many young adults. It’s crucial to be organised and have a plan of action if you’re about to go on your first journey as a financially independent person.

You may accomplish some of your long-term objectives, like travelling or home ownership, by being committed to saving, living within your means, and developing your credit. Building a solid financial foundation may require some effort in the short term, but it will benefit you in the long run.

With the Experian Boost tool, the easy method to include things like your mobile or streaming service bill to your credit report, you may give yourself a boost at this crucial time. Just for paying your regular bills on time, you could receive bonus points at a time when you most need good credit.