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6 money tips for new college graduates

You have your first full-time job. Now what?

Congratulations, college graduate. You earned your degree and landed a real job with a real paycheck – your higher learning already is leading you to higher earnings.

With your newfound wages, it’s exciting to feel like you’ve graduated from being a “poor” college student — one that survived on ramen noodles — to a young adult that can afford a night out.

Although you have the ability to treat yourself every now and then, it’s important that you develop good habits now so that they stay with you. Your future self and family will thank you for it.

Now that you have your first full-time job, here are some tips to make the most of it.

Be smart with your money — create a budget

Many students enter college without a good understanding of managing their personal finances (i.e., paying bills, saving money, maintaining a budget). In fact, 7 out of 10 college students make decisions that hurt their credit soon after graduating.1 And unless college students major in finance or economics, they’ll oftentimes graduate college with a limited skillset in the financial literacy department.

Luckily, you don’t have to be a rocket scientist to be smart with your money. You just need to create a realistic budget — and stick with it.

Though it’s tempting to splurge on yourself (after all, you’ve just graduated college!), don’t spend one penny more than what you make. You need to have some money left over to squirrel away into savings for unexpected emergency expenses, such as a much needed car repair. As a new college graduate, you’re limited in how much you can save. Aim for $1,000. You can reach this amount in under a year, if you save just $25 a week.2

Some experts recommend a zero-based budget. That means if you make $3,000 a month, every cent you save, invest, donate, and spend on rent, food, transportation, and phone should equal $3,000. If, after you make your budget, you find that you have any extra money left over, assign it a good home — such as your emergency savings fund.3

After creating your budget, consider setting up automatic bill pay and savings so that nothing — including any good intentions — falls through the cracks.

Find a place to live

After graduating college, many young adults return to their family roots when choosing a place to live. In fact, more millennials live at home with their parents (32.1 percent)4 than they do with a significant other (31.6 percent)4 or by themselves or with roommates (14 percent).5

It’s not because they don’t have jobs. Rather, many fresh-out-of-college jobs are located in cities that are very expensive to live in.

If you choose to go it alone, make sure you spend an appropriate amount on your rent. That means no more than 30 percent of your gross income, so that you don’t become “rent-burdened.”6 And during the application process, be sure you have the proper documentation (pay stubs, bank statements, etc.) on hand for proof that you can pay the required rent.

A couple money-saving tips: Try to choose a rental that includes utilities so that you don’t need to guess how much heating or cooling will cost each month. If you’ll be driving your car to work, pick a home location that’s close to your office. The less you spend on gas the more you’ll have for your cappuccino fund. (You’ll need the caffeine boost so you’re alert for any early-morning work meetings.)

You might not want to say good-bye to roommates just yet. By splitting the rent, utilities (if they’re not included in the rent), cable and Internet expenses, you can save hundreds of dollars. This “extra” money can go toward other expenses, such as paying back your student loans.

Make plans to pay back your student loans

Now that you’ve graduated college, you’re on the hook to pay back your student loans. You’re in good company: About half of all adults (4 in 10) under the age of 30 have student loan debt.7

Once you graduate, you usually have a six-month grace period before you need to make your first loan payment; don’t leave it until the last minute to figure out a payment plan. Most graduates are automatically entered in The Standard Repayment Plan, which will have you paying off your loan in 10 years. If you sign up for automatic debit payment, you won’t need to worry about remembering to make your monthly payment and you’ll receive a 0.25 percent interest rate deduction.8

If you took a job as a public servant, you might be able to have your loans forgiven. Learn more by visiting Also, a good resource for tips on how to manage your student loans is

Take advantage of your employer’s benefits

Did you know your salary accounts for about 70 percent of your total compensation? That means the other things that go along with being an employee — such as health insurance, retirement plans, employer stock purchase plans, disability and life insurance, wellness programs, transportation expenses, and additional learning opportunities — can make up the other 30 percent.9

Make sure you’re aware of all the benefits and take full advantage of them. 

For example, contributing to a Health Savings Account (HSA) or a Flexible Spending Account (FSA) can help you with your medical expenses and save on taxes. Also, most employees contribute to their 401(k), but one in four employees aren’t contributing the full amount that will lead to an employer match10 where offered or where available. Even though retirement is years down the road, you want to do everything you can today to benefit your family’s future. 

Be wary and mindful of how you use credit

Making payments on a student loan and car loan can help establish and build your credit profile. You can also increase your credit score if you have a credit card — and a good payment history. Unfortunately, only 40 percent of people ages 18 to 29 pay off their credit card balance each month.11

If you do decide to apply for a credit card, make sure to pay your monthly bill on time. Ideally, only charge what you can pay off each month. If you find yourself unable to pay off a credit card bill in its entirety, then be sure you at least pay the minimum amount that’s due. If you’re late with a payment, your credit score could take a big hit. We’re talking 90 to 110 points.12

Also, don’t max out your credit card for a couple reasons: If you do, you probably won’t be able to pay it off during the next payment cycle. Plus, owing more than 30 percent of your credit limit will result in a lower credit score.11

And, remember, having a healthy credit score is important. It might enable you to refinance your student loans at a better rate and to make bigger purchases down the road — such as a home. 

Remember money isn't everything — Make time for your family, your friends and yourself

We know you’ll work hard in your new job. And that’s good. But when the work day has ended, go home and make time for other important things — like your relationships with loved ones, including yourself. That might mean preparing a meal, going for a walk, or taking a fun class with others or by yourself. 

Your schedule is probably more flexible now than it will be in just a few years. So taking the time now to develop healthy non-related work activities will stick with you and help you grow as a person. And this will help you in your career and in life.

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  1. Hardekopf, Bill. “70% Of College Students Damage Their Credit Shortly After Graduating,”, April 16, 2018.
  2. Fried, Carla. “Financial cheat sheet for new college grads,”, June 1, 2017.
  3. Sykes, Tanisha A. “Money 101: Financial advice for college grads,”, May 15, 2017.
  4. Dickler, Jessica. "More college grads move back home with mom and dad,", June 11, 2016.
  5. Dickler, Jessica. “For college grads, an alternative to living with mom and dad,”, May 11, 2017.
  6. Kaysen, Ronda. Ask Real Estate,, October 18, 2016.
  7. Cilluffo, Anthony. “5 Facts About Student Loans,”, August 24, 2017.
  8. Helhoski, Anna, “This student loan tip saves you money year after year,”, February 21, 2017.
  9. Carter, Erik. “5 Valuable Employee Benefits You May Not Be Taking Full Advantage Of,”, April 2, 2017.
  10. Epperson, Sharon; Young, Katie. “Your employer benefits can save you thousands,”, June 21, 2016.
  11. Dickler, Jessica. “Here's a way recent grads can build good credit,”, June 9, 2016.
  12. Backman, Maurie. “Nearly Half of Americans Never Got Schooled on Credit Cards,”, May 7, 2018
DOFU 7-2018