Essential Money Tips for New Graduates

Jaime Ochs
May 12, 2022

Your hard work has paid off. You earned a degree and may soon land your first full-time job. Before you know it, you’ll be managing an income that likely exceeds what you earned while in school. With all of the excitement that comes with graduation and a new job, don’t forget to take some time to look at your finances and start building healthy financial habits for your future.

 

Graduates

 

Consider these five tips for your post-grad life:

 

Master your budget – Your budget is the roadmap for your financial journey. Get a clear picture of your take-home pay and begin developing a spending plan that covers your expenses, allows you to save for the future and have a little fun. Budgeting is an ongoing process of trial and error to determine what works best for your lifestyle. Remain committed to the practice of budgeting, learn from your mistakes, and celebrate your successes.

Keep your money safe – If you don’t already have a checking account, now is perfect time to open one. Your employer can direct deposit your pay into your account and some accounts like Hancock Whitney Personal Checking Accounts offer early pay – access to your hard-earned paycheck up to two days early. Consider a savings account as well to start building an emergency reserve. Set up automatic transfers from your checking to savings account to put saving on autopilot.

Meet your match – Your new employer may offer a 401(k) match on your retirement plan contributions, meaning that they are adding free money to your retirement account. While each 401(k) plan is different, a common suggestion is to contribute enough to maximize the matching fund. Want to get an early start on reaching your retirement goals? Aim to contribute 15% of your annual gross income —this is the amount most financial experts recommend1.

Tackle student loan repayment – If you’re part of the 64 percent of graduates who took out a student loan to fund your education2, it’s important to understand your repayment options. Depending on the type of loan you have, you may be able to choose between a variety of repayment options. A standard repayment plan offers equal monthly payments for a set period, a graduated repayment plan starts with a lower monthly payment and increases over time, and an income-driven plan sets monthly payments as a percentage of your discretionary income and changes over time. It’s also important to understand when you need to begin repayment. Many loans provide a grace period between when you leave college and when repayment begins.

Get credit smart – You likely have some near-term financial goals you’re working toward – a new vehicle, or even your first home. To achieve these dreams, you’ll need to ensure your credit is in check, and that’s something you can start working on now. First, obtain a copy of your credit report at www.annualcreditreport.com and review for accuracy. Locate your credit score to get a snapshot of where you stand—in many cases you can find your score through services provided by your primary financial institution. Then, start implementing good credit practices such as making your payments on time, catching up on past due accounts, and minimizing the number of times you request new credit accounts.

Implementing one or all of these tips can position you for a strong financial future. If you’re looking for more ways to boost your financial knowledge, check out Hancock Whitney Financial Cents, our online learning platform that provides practical information for every stage of life.

 

Sources:

  1. “Here’s how much money you should be investing in your 401(k),” cnbc.com, April 4, 2022. https://www.cnbc.com/select/how-much-money-to-put-in-401k/
  2. “See 10 years of Average Total Student Loan Debt.” Usnews.com, March 31, 2022. https://www.usnews.com/education/best-colleges/paying-for-college/articles/see-how-student-loan-borrowing-has-risen-in-10-years