Essential Money Tips for New College Graduates

Congratulations!  You’re a college graduate, that’s an impressive achievement and you deserve recognition for all of your hard work.  The most common question new college grads have is, “Now what?”

Making a financial plan now can get you the head start in life you need.  Courtesy of the professionals at BW James, here are some essential tips for new college graduates to put their best foot forward:

Pick up a book or two on money basics

We know reading a book is probably the last thing you want to do after conquering that reading list from college, but you know better than anyone there’s nothing like an education so it is a good idea to educate yourself on the basics of budgeting and financial planning.

Make a budget

After you get a few months of work under your belt you’ll be used to the amount of take-home pay you’re earning.  That’s when it is time to figure out how much money you can afford to spend each month.  Mapping out your budget is a great way to quickly uncover whether you’re on the rocky road to spending more than you make – as many college graduates start out doing.

Cut the housing costs

Don’t jump to quickly into having your own place, whether you are able to stay at your parents for a year or two or getting a roommate to split that apartment bill, lowering your rent costs as much as possible will allow you to use that extra money to start slashing into those looming student loans.

Steer clear of debt

You’re likely to be bombarded with credit card offers, and while they may be tempting, do everything you can to keep them in the trash.  Acquiring more debt than you already have can be a dream killer.  Debt will prevent you from taking a job you might love because the salary won’t be high enough to meet your monthly obligations.

It can even shut the door on a job offer altogether, because an increasing number of employers are checking prospective employees credit reports as part of their due diligence.

Top Priority: Emergency Fund

Start building your rainy day money immediately.  The rule of thumb is to set aside the equivalent of three to six months’ worth of living expenses.  A year is ideal, but that can take time to build, but you should make this a personal goal.  

A money market mutual fund or a separate bank savings account are smart places to put this rainy day money.

These are just a few smart ways to start saving for your life today.  A head-start is invaluable and goes a long way to a long, happy, and stress-free life.  For more information about financial planning and the professionals at BW James visit http://www.bwjames.com