financial planning for recent college graduates

Getty/Robyn Beck

At mid-summer, it’s already a potential “make or break” time for newly-minted college graduates.

Why? Because now all those grads can finally shake off all that confetti and champagne and focus at the job at hand – getting financially prepared for the adult world.

Many college grads face an uphill climb with that task, give the average student loan burden of $37,172, and an average monthly student loan bill of $393 per month, according to

Chances are that the newest members of the post-collegiate workforce have jobs, buoyed by their degrees and a robust U.S. economy.

With college loan bills coming due, and the best paychecks of their young lives popping to their bank accounts on a regular basis, new college graduates are actually in a great place to start framing their fledgling financial lives – if they make the right money-saving moves right out of the gate.

“Saving money is a habit, and the same way it took us multiple attempts over time to learn how to tie our shoes correctly, then effectively, then quickly, the same principles apply when seeking how to improve or build habits of financial abundance and stability when you’re young,” says Krista Neeley, managing vice president at Appreciation Financial, in Houston, Tex.

Neeley says that starting young means building a healthier relationship with money – but you have to want it.

“Money can be one of the most empowering tools and one of the most frustrating, but it’s determined 100% by us,” she says. “Saving for long-term goals while you are young is also vital when remembering interest and accounts build up over time which is only on your side before age 40. After that, long-term savings (like retirement) become increasingly expensive.”

money-saving tips for new college graduatesmoney-saving tips for new college graduates

Money-saving moves to make for any new college graduate

Starting a savvy personal money management movement while you’re young can pay great dividends down the road. Doing so can lead to buying a home earlier, paying your student loan off earlier, getting a better credit score, and accumulating more money for long-term savings and retirement.

If that sounds good to you, apply the following financial tips to your life, and get a big head start on wealth accumulation in your first year out of college:

Live below your means – and keep living below your means

Don’t chase a lifestyle and use every extra dollar you have in pursuit of more stuff, says Richard Best, a writer for with over 30 years’ experience in the financial sector.

“Rather than entrapping yourself when you can least afford it, discover the freedom that living beneath your means can bring,” says Best. “Create a budget that targets a level of spending at least 10% below your take-home income. Allow some of the frugality you learned in college to spill over in real life until you achieve stability in the relationship between your income and spending. It’s a habit that will serve you well for the rest of your life.”

Check your credit report

Find out immediately where you stand with your credit score health.

“A poor credit score may impact their ability to obtain certain employment in addition to difficulties in obtaining financing or successfully leasing an apartment,” says Charlie Scanlon, a St. Louis-based attorney at Phoenix Credit Consultants. “You may be surprised to learn that you have no credit score. Oftentimes, new graduates have a “thin” credit file because of an absence of borrowing history and there is not enough data to generate a score.”

You can get a free copy of your credit score at Use it as a guidepost going forward as you start to pay rent, buy a phone, pay back your student loan – all the things that will eventually make their way into your credit report. By paying your bills on time and managing debt correctly, you’ll start building a credit score that will help you get better loan and credit card terms down the road.

“Also, make sure you check your credit card for errors, too,” Scanlon says. Mistakes on your credit report can bring your credit down and cost you money – fix those mistakes as soon as possible, Scanlon advises.

Focus immediately on your student loan debt

Don’t get complacent with the six month grace period on your student loan debt, experts say.

“If you can, start making payments on your student loan debt as soon as possible,” says Joy Alford-Brand, a bankruptcy attorney in North Carolina and author of the book Money Basics, Keeping it and Growing it: What I Learned About Money as a Bankruptcy Attorney. “Your mentality should be the sooner you can get out of debt, the better.”

If you hit the job jackpot, consider staying in the 10-year standard repayment plan and making extra payments when you can, Alford adds. “While the payments will be higher, you’ll save a ton in interest over time. You can always apply for a hardship deferment or an income-driven repayment plan if you find you need help making your student loan payments.”

It’s also a good idea to obtain a complete history of your federal student loan debt by visiting the department of education’s database at, Scanlon advises.

“Little if any meaningful information is provided to student borrowers by universities or student loan debt servicing companies,” he says. “Sometimes, students are ‘unaware’ of all of their student loan debt and fail to make payments on ‘all’ of their loans.”

money tips for new grads
money tips for new grads
Pexels/Buro Millennial

Start building wealth – one dollar at a time

Sign up for automatic retirement savings at work right away, advises Patrick Ford, director of wealth management at Brown Wealth Management in San Diego, Calif.

“You won’t miss the money if you never see it hit your paycheck and you don’t need to remember to save each month for retirement,” Ford says. “Also, every time you get a raise, increase your monthly savings a little bit. You’ll still take home more money, but you’ll be saving more and you’ll never even feel it.”

Additionally, know that most company retirement plans now offer investments called target date funds, which are diversified and designed to fit the needs of people of a certain age range.

“These funds automatically invest aggressively early on and become more conservative as one approaches retirement,” Ford adds. “So make your monthly savings automatic, increase it as you get each raise, and pick a target date retirement fund as your investment. You’ll be lightyears ahead of most grads with almost no effort.”

Take the right mindset on savings and debt

Savings should be a long-term habit (initiated at a young age is best), and debt should be a short-term situation, says Neely.

“Promising to pay yourself first by saving 10% of your income with every paycheck and bonus is vital, as you cannot expect to feel or gain wealth when you blow every dime that comes to your pocket,” she says. “Debt can be eliminated in chunks and should be done consistently regardless of immediate desires (like a Starbucks run every morning) or instant gratification (like eating out or impulsive spending).

Check your financial health, too

Remember, too, that your financial health and strength is just as important as your mental, emotional, and physical health and strength.

“Taking time to better understand and empower yourself financially can be the backbone to creating the freedom, flexibility, and peace of mind you desire for your future,” Neeley says. “Having a strong, stable foundation for your finances is the easiest way to create a bright future in all other areas of your life.”