4 Money Basics New Grads *Need* to Prioritize
Graduation is an awesome celebration of your hard work, and brings with it exciting life changes and career opportunities. But it also means more responsibility. You’re not worrying about making it to class on time anymore. Rather, how to consolidate your student loan debt is on your mind. And unless you’re moving to a state that repays student loans, you’re gonna need all the financial planning advice you can get. Here are four things every new grad should have on their financial checklist. Cross these suckers off, and you’ll be on your way to surviving and thriving in the real world (financially, of course — you’re killin’ it otherwise).
Once you’re out on your own, the cost of living can skyrocket. Use a free personal finance app like Mint or You Need a Budget that connect to your bank accounts to track your money and give you a great overview of your spending habits. Ignoring the app because it’s too automatic? Download this budget template to stay on top of every single purchase. A good guideline for how much money should be going towards what is the 50/20/30 rule: 50 percent of your income towards essentials like rent, 20 percent towards savings and 30 percent towards non-essentials (the fun stuff). If you’re spending more than your paycheck, start by looking at your non-essential spending. Eating out, entertainment and shopping are the easiest categories to cut back on.
Chip away at those student loans
If you have student loan debt, be prepared. Your loans will enter the repayment period six to nine months after graduation, and you’ll need to pay at least the minimum payment (more than the minimum if possible!) on a set schedule. If you’re unable to make payments, talk to your lenders about forbearance or deferment, which are good ways to help you postpone payments until you have a steady income. Also use resources like the Federal Student Aid website for additional tips and tricks to keeping student loans in check.
Credit Card Debt
The average college graduate leaves school with a $2,000 credit card balance, according to a Nellie Mae study. It’s important to stay on top of these payments and pay your bills on time, since even one late payment can increase your interest rates and damage your credit score. See if you can make that easier immediately (hooray) by calling your credit card company to see if you can reduce your interest rate.
During these tough economic times, you may find that the only work you can land is temporary, but don’t despair: Suze Orman worked as a waitress for seven years before becoming a renowned financial management guru. If you do get full-time work, take advantage of company benefits, including healthcare and retirement plans, especially if your company offers 401K matching, as soon as you start. If your company doesn’t offer a 401(k), then open up an IRA as soon as you have a little extra change to contribute. It’s never too early to start saving for your future!
Following this checklist will help you enjoy your post-grad life more (independence! happy hours!) and avoid getting weighed down by money stress. Even if you can’t implement everything today, make a plan and get started on as many financial goals as possible. Trust us, you won’t regret it.
Are you a new graduate? Tell us about your own money checklist @BritandCo!
(Photos via Getty)
Your relationship with your finances is one of the most important relationships you'll ever have, and you can't avoid it. That said, for many of us, the pandemic only added to our financial stress. If you find yourself feeling frazzled, just remember that financial insecurity isn't a net-worth issue — it's a mindset issue. And, we happen to have plenty of advice on how to turn your money mindset around so you can take charge of your funds once and for all.
To start, feeling secure begins with a strong foundation, and there's no better time than now to get started stacking the bricks. It's easy to get swept up in the January "new year, new me" mentality, but really? Any time is the right time to get yourself in order. You don't need to wait for a new year, a new moon, the right moment, or a sign from above. You don't even have to start on the first day of the month — you just need to start.
Introducing NerdWallet: A Safe and Reliable Money App
To help with that, we've put together a list of the just-right-for-you ways that NerdWallet can help you monitor your financial outlook. Haven't heard of them yet? NerdWallet is a personal finance company that helps consumers make smarter financial decisions. Their website and app let you compare different financial products, find articles and tools to make financial decisions with confidence, and keep tabs on your finances (hey there, credit score, I see you!) all in one place. Plus, NerdWallet has over 75,000 glowing reviews in the App Store (and a 4.8 star rating) if you want to read up on any more testimonials.
Tim Chen, NerdWallet's CEO and co-founder, started this financial journey in 2009 after his sister needed help finding a credit card. Even with an economics degree and a Wall Street background, it took awhile for Tim to find the right recommendation (so don't feel too bad when it takes you a while, too). Their mission is to bring clarity to all of life's financial decisions.
So it's safe to say that NerdWallet is a pretty good sherpa for your journey, too.
Get the most from your money
Did you know that the money you park in a savings account can lose value? Harsh, but true. If your money isn't earning interest that's on pace with inflation it will actually be worth less to you in the future. And if the bank charges fees? Forget about it. Make sure you're earning the interest you deserve and come out on top. NerdWallet has researched dozens of financial institutions to help consumers find the best options. The hard work has already been done for you, so you can just select the account that works best for you and your nest egg.
Keep an eye on everything, securely
Once everything is set up, tracking and managing your finances is what will keep the money machine running smoothly. You can create an account either through the site or the app and link your bank accounts, then keep tabs on all your finances in one place. Get a clear picture of your saving and spending, get insights into how to master your money, and even build your credit score all in one place.
Get extra credit points
Do you have the best credit card for your lifestyle? Some cards give cash back on every purchase, ones with travel perks, and ones that charge way less interest than you're paying now. NerdWallet takes the guesswork out of choosing the right credit card with simple side-by-side comparisons of different credit cards so that you feel confident choosing the right one. Whatever you want to do, NerdWallet can help you find the best credit card to get it done.
Know your options for settling down
Mortgage rates are pretty low and it looks like they're going to stay that way for awhile, so buying a home might be the move sooner than you think. But there's so much more to a mortgage than just the interest rate! To help you choose a mortgage lender, NerdWallet has in-depth reviews on multiple lenders in a mixture of categories so you get the home loan with the mortgage rate, term, and fees that's right for you.
Settle an old score
NerdWallet helps you monitor your credit score for free and helps you see how little things (like raising the limit on your credit card or paying your bills on time) can increase your score. NerdWallet partners with TransUnion® to provide your VantageScore® 3.0, based on information in your TransUnion® credit report. Your score and credit report information are updated weekly. But that's not even close to all:
- They provide you with tips from experts on how you could build or optimize your credit score
- You'll get a detailed look at your credit score and all the factors that go into it—your payment history, credit utilization, the age and type of accounts, balances, and any recent inquiries
- The credit simulator tool gives you an idea of how your credit score would change if you applied for a new credit card, closed your oldest credit card, or got a new auto loan
- You also get free, unlimited access to your credit report
When it comes to managing your money, safe and reliable is where it's at. Establishing a healthy relationship with your finances begins when you take control and practice habits that build wealth. Signing up just takes a few minutes. Set your intentions to build a solid financial foundation, it will only strengthen your relationship with your finances. And don't be afraid to get a little nerdy while you're at it.