Graduating college is an exciting accomplishment and one that opens up the doors to your new adult life. However, as a new graduate, the chances are that you have the burden of student loans following you around and if you didn’t take advantage of those naughty college credit card offers, you are in need of building a little credit. In other words, it is now time to gain an understanding of your personal finances and how to keep them under control.
The first thing you should do out of college, if you haven’t already established one, is to open a checking and savings account. Most banks offer these types of accounts free of charge with a few simple conditions. Since you are just graduating and your cash flow is probably fairly low, you should opt for an account that doesn’t require a minimum balance to avoid penalties if you account falls lower than you expect. Your new checking account should be used for everyday purchases, while your savings should be used strictly for savings. Avoid dipping into your savings funds to purchase things you really don’t need.
Second, create a budget using your monthly income and expenses as a map. You don’t necessarily need to create a strict budget, but watching where you spend your money and tracking how much you can actually afford to spend on a monthly basis is a good idea and can help you stay away from incurring more debt.
Third, start saving for a rainy day. The creation of an effective budget or spending plan can free up a little extra money to be put away in your savings account on a monthly basis. Creating an emergency saving equal to about six months of your monthly living expenses is a good way to protect yourself from life little surprises. Similarly, if you have some larger purchases you would like to save for, such as buying a new car or saving to purchase a home, now would be a good time to start saving for those things as well. Although it may seem like a bit too early, if you have the good fortune of working for a company that offers a retirement plan, now is also a great time to sign up and start making monthly contributions to your future retirement.
Finally, begin paying off the debt you do have and try not to incur and more. Approximately six months after graduation is when you usually start seeing the bills for your college education. Start making your loan payments as soon as possible and if the payments are too high, speak to your loan provider about their options to lower your payments to something you can afford. Many loan companies offer consolidation, income based repayment plans, deferment or forbearance’s that may help you keep your loans in good standing while you try to find a new job and work to pay off your student loan debts.
Author’s Bio: Valerie Anne Reyes is an in-house writer from Franklin Debt Relief, a company specializing in programs for people with high credit card debt.