Smart Financial Moves to Make After Graduation

financial moves after graduation
Last Updated on March 09, 2020 by Imad

Graduating from college is one of the most exciting times in a young adult’s life. Once you’ve earned your degree, you’re on track to starting an exciting and fulfilling career. But before you throw your graduation cap into the air and start celebrating, it’s important to remember that this means you’re also entering the world of adulthood. While it may seem like this will come with more freedom and control of your own life, it also comes with far more responsibility.

Therefore, it’s important to be prepared for the inevitable challenges ahead. Even if you have the support of your parents, it will be important to start working towards financial independence—meaning you will soon have bills to pay, and financial decisions to make that could impact your life in the long run. Instead of going in blind, we’ve prepared a list of tips to help you get ready for your adult life, and the financial challenges that will inevitably come with it.

Discover Your Job Options

Most college students start to immediately look for work after they graduate. The inclination is to get their career started early in the hopes to get a solid footing. However, few take the time to really think about the type of career that would best suit them. Most think the only option is to find full-time employment for a business in their field. However, for some people, it might be a better idea to take the road less traveled.

Today, freelance work is becoming more and more popular, and profitable, for those who find that their skillset is a better fit for this type of job. This holds especially true for people with an art or business degree, where people with their skill sets are frequently hired on a case-by-case basis, rather than full or part-time positions. To cater to this new gig economy, consider starting a sole-proprietorship or freelance business after graduation. The earlier you start, the easier you’ll be able to build up a dedicated clientele and earn more.

Keep in mind, however, that not everyone is cut out for freelance, just as not everyone will find themselves succeeding at a full-time 9-5 job. Therefore, it’s important to ask yourself which one you would be best suited for. If you’re someone who likes to set your own schedule and make your own work, a freelance career might be perfect for you. However, if you like the stability and structure that comes with a full-time job, start getting your applications out early. At the end of the day, you’ll need to spend some time self-reflecting to truly find your calling.

Here is our ultimate guide about working from home

Set up a Bank Account

During college, chances are you held an account at your parents’ bank. You may have even shared an account with them or received some extra spending money. While some graduates may find that their current bank account works perfectly for them, others may start to consider the other options available to them.

For example, local credit unions, which are different from a bank account, often offer lower costs than a traditional bank and give great opportunities for large financing options, such as car loans and mortgages. Because they are local, they are also easy to access and generally provide quality customer service.

Many young graduates also find much more success with digital banking, an option that allows them to access their finances directly from their mobile devices. This is especially great for tech-savvy graduates who are constantly using their phones. Keep in mind that, as a young graduate, you may not have an extensive credit history. While this can limit your access to certain banks, some digital banks don’t consider credit history during the application process. This can be especially helpful for those with low or no credit scores.

Build Your Credit Score

Speaking of your credit score, it’s something that applies to more than just banking: it’s the major determining factor for loan applications, such as housing, credit cards, and even some jobs check credit scores during their background checks. Your credit score is determined by the three major credit bureaus, and each one bases it off of factors such as your payment history, how long you’ve had your credit score, and how much debt you currently have.

With this in mind, it’s important to start building your credit while you’re still young—after all, the longer you have a credit score, the higher it is going to be. Ideally, you should aim for a good credit score: around 700. However, if possible, one should aim for a credit score of 750 or higher, which is considered excellent and can give you access to better interest rates. Consider looking into beginner ways to start getting your credit score boosted, such as credit builder loans or secured lines of credit. If you do take steps to build your credit, remember to always make your payments in full, and avoid excessive credit card spending: as this could negatively impact your score.

Save While Expenses Are Law

If you’ve recently gotten a job out of college, or are getting your freelance career off the ground, you may find yourself with more money than you’re accustomed to. especially when compared to your part-time work in college and high school.

With all this new money coming in every paycheck, the impulse might be to spend it all on cool things to impress your friends, like a new car or Gucci belt. However, this type of spending is considered lifestyle creep, and it’s one of the reasons that even high-income earners may find themselves in debt with a lack of savings.

Considering that you might be living with family or roommates for one or two years after graduation, now is the best time to start building up your savings, as your expenses are going to be lower now than they will be in the coming years when you have a place of your own and more payments to make. Use this time to start saving for a down payment on a house, which is one of the best ways to create wealth long term. You should also save in order to build an emergency fund, which can help you avoid going into debt for things like car repairs or unexpected health costs.

Read our article about Saving And Investing.

Learn to Invest

Finally, it’s important to learn investment strategies now, no matter how daunting they may seem. The younger you start, the more money you will have in the long run due to compound interest, which is the continuous growth of your money due to stock values increasing, and frequently buying into the market on a regular basis. As you learn to invest, you may even find a niche that you are particularly interested in, such as real estate investing, or peer-to-peer lending.

However, be careful to ignore investment gurus offering pricey classes, or telling you ways you can “beat the market.” These people are only in it to make money, and oftentimes can cause people to lose money. The most tried and true way to make money in investing is by consistently investing in a diversified portfolio. This helps you keep your emotions out of the equation, and is the least risky strategy.

So congratulations on graduating! You have a long, bright future ahead of you, and there’s no better time than now to start getting financially prepared for it. Remember to take things slow. There’s no reason to rush, as you have a lifetime to build your career, earn money, and find financial stability and freedom.

Last Updated on March 09, 2020 by Imad
Imad Aharchaou

Imad Aharchaou

Imad Aharchaou is a full-time blogger and SEO expert. Join Imad and 10,000 monthly readers here, on to find new online jobs opportunities. Imad Covers also personal finance topics and reviews the best jobs and careers and the best tools to run your online business.



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