5 Financial Steps to Take After Graduating From College

5 financial steps to take after graduating from college. So! You’ve just graduated and you feel like on top of the world. And the next thing you notice is that you need to repay your student loans. Whoever said college life was fun, sure was right.

It is fun, but the troubles start when you graduate. Paying off those debts can be pretty “fun” too. Trust me on this one; you are not the only student with debts to pay off and money problems to handle.

This article will guide you what five financial steps you need to take after graduating from college to make your life easier. 5 financial steps to take after graduating from college:

1. Budgets Can Be Really Helpful

The first and foremost thing to do is putting together a budget. If you hate to do so, there are articles on our page that can tell you how to enliven the whole process to make it more bearable. You may be thinking, ‘Who needs a budget?’ Apparently, you do.

That is how you are left with no money at the climax of each month. There are many online self-help budgeting tools that can aid you in this feat. A budget can help you in keeping money for your needs and also keep some safe for the fun in life.

They can help you in organizing your financial life. Another way to do this is by writing everything down; whatever you owe, write it down to the last penny.

Read Also: 5 DIY Home Improvements That Will Save You Money

2. Don’t Spend That Money, Lest You Save That Money

Start saving whatever you can! According to an article by the Wall Street Journal, “Your youth is a giant investing advantage that your parents no longer have—don’t waste it. Start saving for retirement now.” Keep money aside and invest it in mutual funds.

These funds have trained professionals who can manage your whole portfolio and reduce your risk via diversification. Start saving for retirement because you don’t know what your health situation will be in the future?

Compound interest can work wonders. Here’s how interest compounds over time: If you save $10 a day at age 25, you’ll have more than $1 million by age 65, assuming an 8% annual rate of return. If you start at age 35, you’ll have $445,000. At the age of 45, you’ll only have $180,000.

3. Let’s Talk About Insurance

For most of your student life, your parents have been paying for the car, and life insurance. Since you have graduated now, your parents would want you to bear these costs. These costs can be a bit daunting. Okay, very daunting. But fear not brethren!

We have found a solution for you. As for your health insurance, you can be lucky if you find a job which covers the area. In case it doesn’t, get a basic health insurance plan, nothing too fancy.

Coming towards your car insurance, it can get pretty costly if you are a bad driver. There is another blog post on our page that can guide you on 5 ways to cut your insurance costs.

4. Student Loans

Now, most students take loans to get through university. It is nothing new. But if your student loan is such that asks for payments around 6 months after graduation, you need to worry. You have to pay each loan and the best option is to save. You can also consolidate those loans with one single lender.

Consolidation carries some benefits like you make a single payment, and the ability to extend as well as customize the loans.

5. What About The Credit Card?

Use it WISELY. Start working on paying off the money you have already used before you borrow more. Aim to return the balance every month in full. In our opinion, debit cards are better than credit cards, because you use what money you have and not money that isn’t yours.

However, credit cards have the option of improving your credit score if you use them wisely. Compare the trade-offs here.

These five financial steps will be more than enough to make you financially healthier. If you think you can add more tips to this list, please comment below and also let us know how you tackled your financial problems after graduation. (*)