A Checklist for Fresh Grads

It’s graduation season and if you or someone you love is celebrating this accomplishment – congratulations! And welcome to the beginning of a new chapter in your book of life.

You’ve spent a lot of time and money building up your future potential. Now that you’re about to cash in on that investment, make sure you make choices that will help you achieve the greatest return.

Here is a checklist of things that will help you build a healthy financial future:

1. HIT THE GROUND RUNNING – TO EARNING!
Use every resource at your disposal to find a job. Look to LinkedIn, alumni networks, meet-ups, internships, and temp agencies. And don’t get caught up in holding out for the “perfect” job. Every work experience provides valuable learnings, marketable skills, and networking opportunities – all of which can be leveraged toward landing that Dream Job down the road.

2. REPAY STUDENT DEBT
Make a plan to repay your student debt. You cannot run away from, or declare bankruptcy on, student debt. In fact, if you default on your loan, a process of phone calls, wage garnishments (up to 25% of your income!), asset seizures, and house liens can start.

If you think you’ll have problems keeping up with payments, look for relief. For federal loans, look to income-based payment plans or try to extend the term of the loan, both of which will lower your monthly payments. For private loans, try to refinance at a lower interest rate or seek a longer loan term. However, keep in mind that while extending the term of the loan will lower your monthly payments, you will also pay more interest over the life of the loan.

3. EMERGENCY SAVINGS
Put some money away in a savings account that is reserved strictly for emergencies. Most people experience career bumps or unexpected expenses and having money set aside could help bridge income gaps that might arise. It’ll also help give you a little peace of mind, too. Aim to build up an emergency fund that is equal to 3-6 months of expenses.

4. MAKE A BUDGET
Calculate your total monthly income, then subtract your monthly expenses, including taxes, and see how much money is left over. If there isn’t any, find ways to cut back on expenses. Remember, the key to financial stability is not how much you earn, but how much you keep. Set a cap on what you spend each month, and before you know it, you’ll see savings adding up in your bank account.

5. DON’T RUN UP CREDIT CARD DEBT
Lifestyle inflation – make more, spend more – can be tempting. But, paying high interest on things like dinners out or vacations is not a great idea over the long term. You can definitely spend your money – just make sure you’re living within your means.

6. INVEST IT
If you have any money left over after all of this, think about investing it. It’s never too soon to start! Don’t overlook long-term savings opportunities like investment accounts, your employer retirement fund, or even life insurance. Putting your money to work for you early in life will help you enjoy better financial options in
the future.

Enjoy this new chapter in life. You have the freedom to spend your time and money as you wish. But with that freedom comes responsibility. And the earlier you get into good spending and savings habits, the more money you’ll have working for you over your lifetime.