If you’re a recent grad, you’ve spent the first four years (or more) of your adult life sitting in a classroom, but now real life is out there waiting on you. You graduated a couple of months ago and if life is good, you’ve landed your first real-world job in the area of your major and are pulling in a decent, if modest, starting salary. If you’re still on the hunt for a job, you may be blending lattes, substitute teaching or temping. No matter what your job status, it’s time to develop a grown-up money strategy and the sooner, the better.
Check out these six pieces of advice for getting on the right financial footing from the get-go:
#1 Don’t start spending just because you can
Once those paychecks start rolling in, it may be tempting to buy that stuff you couldn’t afford in college. Most students have a mantra that goes “Once I graduate, I’m going to buy…” That’s all well and good, but you shouldn’t indulge. Unless it’s something you actually need (versus a casual want, no matter how passionate), put it off for now and work on your nest egg instead.
#2 Learn some life skills
One way to save big bucks is to learn to DIY life’s essentials. Learn to cook if you don’t know how. DVR episodes of Rachael Ray’s A Week in a Day to see how to cook a week’s worth of meals ahead of time. Learn to hem pants, sew on buttons and iron so you don’t need the tailor or dry cleaner. Know how to clean your toilets and make basic home/apartment repairs as well.
#3 Start working on your credit
A high FICO score will save you money on car insurance, credit card interest and a ton of other stuff. Get started beefing up your score by finding out what your score is – order a free credit report now. Start by getting a credit card, use it sparingly and pay it off in full each month. Pay your student loans on time and always pay your bills promptly. This will get you off to a good start.
#4 Consider postponing grad or law school
If you had to take out student loans to pay for your Bachelor’s and are considering an advanced degree, why not put it off for a few years and focus on your career. You may even find an employer that’s willing to foot some of the bill for your Master’s or law degree. At least take a bite out of your exiting student loans before accumulating more expense (or debt) for school.
#5 Live modestly
This one is critical. It’s tempting to want to have everything your friends or co-workers have, but that’s not a smart money strategy. Living below your means will keep you from stressing about finances and make sure you can build your nest egg and save up for important milestones like buying your first home, being able to afford to get married, take vacations, etc.
#6 Put savings on auto-pilot
Savings are all important. There are two ways (at a minimum) that you need to be saving. First, if your employer offers a 401(k) with a match, you should be contributing an amount that will max out the match. Second, set up a savings account and have a percentage of your salary go there each payday automatically and don’t touch it! This is your nest egg and it should be sacred.
Another way to get the most from your money is to read our blog often for tons of great money tips. And if you’ve got student loans, sign up for Tuition.io’s free student loan tool to track and optimize your debt and shed it sooner.