Financial Tips After College

You're out of college and on your own. Learn how to begin your working life with good financial decisions.

Start with a plan

You need a plan to achieve your budgeting and savings goals. This involves tracking all of your expenses, writing down your goals, setting time frames and figuring out what you must do to meet them.

Find out how much you are spending.

This planning process is important in two ways. First, when you set your money goals, you can determine whether your day-to-day spending habits are helping or hurting you. Second, the goal-setting process helps keep you on track and focused on your budget - and helps ward off the temptation to spend beyond your means.

Learn what it's worth to reduce your spending.

Getting into the saving habit

To reach your goals, you have to save consistently. This is the single most important key to successful saving. Saving should become a habit. And, a good way to get into the saving habit is to make sure that you "pay yourself first" every month before you pay the bills.

Depending on your needs and investing time frame, you can get a portion of your paycheck sent to a variety of savings vehicles. You can have as little as $25 to $50 a month, for example, sent automatically to a savings or money market account that you can use to pay down your debts, or for short-term goals like buying a car. To get security with competitive returns on your money, look into FDIC-insured certificate of deposits (CDs) or FDIC-insured individual retirement accounts (IRAs).

Build a cash reserve

If you should lose your job or become disabled, you'll need savings to fall back on until you get a paycheck again. Try to save at least three month's worth of living expenses in an easy-to-access "liquid" account, which includes a checking or savings account. Saving emergency cash is easier if you can use automatic transfer to designate an amount of your salary each pay period to be automatically transferred into your savings account - before you even see your paycheck.

Learn more with a basic guide to growing your money.

Steps to help you get out of debt

For most people starting out on their own, paying down debt is the first step toward freeing up cash for the financial protection they need. If you're spending more than you make, think about areas where you can cut back.

If you owe balances on high-rate credit cards, look into getting a low-interest credit card or bank loan and transferring your existing balances. Then, plan to pay as much as you can each month to reduce the total balance, and try to avoid adding new charges. Learn more about choosing the right credit card.

If you have student loans, there are ways to help make paying them back easier. For example, you may be eligible to reduce your payments if you qualify for the Federal Direct Consolidation Loan program (phone 800.557.7392).