Tips for Recent Grads to Take Control of Their Finances
educating-myself | Read Time: 3 minutes
By Shelly Kavanagh | Published: May 2023
Congratulations, you just graduated!
Whether you’re celebrating a high school, college or trade school graduation, this can be one of the most exciting times of your life.
With graduation comes many new responsibilities in life, one of the most important being the need to manage your finances as you enter adulthood.
Here are tips for recent graduates to help secure their financial situation.
Pay Yourself First
Graduation is often followed by another key life milestone: your first full-time job. Whether you’ve already been working or are still on the hunt for a job, it is important to manage your paycheck in a way that can set yourself up for long-term success.
Paying yourself first can be a great way to get started on your saving journey. Set aside money from each paycheck to be put toward your long-term savings for other milestones like a new car.
A good way to do this is to have a portion of each paycheck automatically deposited into your savings account while the remainder is deposited in your checking account and used for everyday purchases like groceries. No amount is too small, and these little steps can add up in a big way over time.
Build Your Savings
High inflation and rising interest rates have made saving more challenging, but those rising rates have also resulted in the opportunity to grow your savings through higher interest bearing accounts like certificates of deposit (CDs), money markets and high-yield money markets.
If you received money as a graduation gift or have started to build your nest egg already, these accounts can be a great way to save toward your longer-term goals, as they tend to earn a higher interest rate than a standard savings account.
CDs come with a fixed rate of return, but your money is locked in for the term of the CD, which can vary from a few months to years, so they’re often best used for long-term goals. Money markets and high-yield money markets are considered liquid accounts, so you will be able to access your money without early withdrawal penalties.
Speaking with your local banker can be a great way to figure out which accounts and products work best for your situation and goals.
Managing Your Credit and Borrowing Responsibly
Credit and borrowing play an important role in your financial journey and can help you achieve many goals, but you need to manage your borrowing and debt responsibly, particularly during high interest rate environments.
It’s important to build your credit score, understand what impacts it and how that affects your ability to borrow.
A credit card used for larger purchases like furniture for your apartment, groceries and other items can help build your score up over time, just be mindful that you will want to pay the balance in full whenever possible to avoid accruing interest and increasing the true cost of your purchases.
Post-graduation can be an exciting time in your life. With the right financial discipline, you can set yourself on a path toward long-term success.
About the Author – Shelly Kavanagh
Shelly Kavanagh is Senior Vice President, Director of Retail Delivery for WSFS Bank. Prior to her current role, Kavanagh served WSFS as Director of Retail Strategy, Regional Manager, Retail Program Manager, and Small Business Relationship Manager. She brings more than 16 years of experience in banking.
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