Assuming adult financial responsibilities may be one of the
toughest tasks you face after college graduation. But if you
approach the challenge in a logical and organized manner, it
doesn't have to be as daunting as it sounds.
To help you get started, here are eight critical financial moves
you should make soon after graduation.
1. Study the job market
You probably looked for your first post-graduate job either near
where you went to school or near where you grew up. That's fine,
but now that you are free to go anywhere to choose, you should make
yourself aware of
what opportunities are available elsewhere
Location makes a big difference in the job market. According to
the Bureau of Labor Statistics, state-wide unemployment recently
ranged from a low of 3.3 percent to a high of 9.7 percent. Mean
wages by state range from a low of $34,770 to a high of $54,740.
Don't settle into your career until you are fully aware of all your
2. Update your checking account
Some banks have special terms that
allow students free checking
. Now that you no longer qualify for those terms, you should look
for an account that will continue to give you free checking. Free
checking accounts are in the minority, but they do exist, and they
are more likely to be found at online banks than at traditional
banks, according to recent MoneyRates.com research.
3. Open a savings account
For many students, banking is strictly a flow-through arrangement:
Money goes into the account, but it soon goes out again to pay for
tuition, expenses or fun stuff. Now that you're a graduate, you
need to start accumulating money, and that means you should open a
Don't necessarily settle for the bank where you have your
checking account. Savings account rates
vary greatly from one bank to the next
, and with the national average now down to 0.07 percent, it is
very important to do better than average.
4. Check your student loan payment schedule
Most student loans have a grace period before you have to start
making payments. This grace period is often six months after
graduation, but not all student loans have a grace period and not
all grace periods are the same. Check your student loan terms to
see when you will have to start making payments, so you won't be
caught short when the time comes. If you have multiple student
loans, don't assume that the grace period is the same for all of
5. Upgrade your student credit cards
Some credit card companies have special offers that help students
get a card with little or no credit history, but that usually means
accepting a higher interest rate. If you've established the
beginnings of a good credit history by consistently making your
payments on time, and you now have a steady income, you may be
eligible for a
lower interest rate
via a non-student credit card.
6. Build an emergency fund
One of the first rules of managing household finances is to expect
the unexpected. You can prepare for the unexpected by building up
an emergency fund. This can help you through problems like car
trouble or losing your job. You might start slowly, but if you put
a little of each paycheck into your emergency fund, it will build
steadily while helping you develop one of the most important
financial skills: the ability to save money.
7. Start saving for retirement
If your employer sponsors a retirement fund, start participating in
it right away, even if you can only afford small contributions at
first. Retirement may seem like a long time away, but the longer
your money is in a retirement plan, the more it can earn though
investment. That means that your earliest contributions have the
potential to earn more of a return than the money you'll put into
the plan in later years.
8. Create a household budget
Managing all of the above, plus taking care of the essentials such
as food, clothing, and shelter, requires planning. To make this
work you need a budget to determine where your money will go, and
to make sure there is enough to meet all your needs. Just make sure
your budget creates room for saving as well as spending.
Once you get past these transitional tasks, managing your
household finances can become more routine. As a college graduate,
you should be well prepared for the challenge. After all, a major
purpose of college is to teach you how to learn, and when it comes
to financial matters, you should never stop learning.