5 Financial Tips for College Graduates | Richard Banks & Associates, P.C.

College graduation season is here, and that means that young adults throughout the country are leaving behind the world of academia for the “real world.”

For those who are joining the workforce, having a solid understanding of financial planning and money management is key.

Financial Tips for the Real World

The state of student loan debt in 2019 is rather gloomy, with an amount totaling $1.56 trillion. There are 44.7 million U.S. borrowers with student loan debt, with a delinquency or default rate of 11.4%.

With the majority of graduating students leaving college behind with student loan debt, becoming effective at money management is extremely important.

Managing money is something that practically everyone can struggle to master, but these five tips can help recent college graduates get off to the right start:

1. Make a plan. The first step is to make a plan—one that includes short-term and long-term goals. Be sure that these goals are realistic, and check up on them regularly. Without a plan, it’s easier to fall into financial pitfalls like mounting credit card debt.

2. Make a budget. By creating a budget, you’ll be able to stay on top of your finances each month. A working budget will help ensure your bills are being paid each month and that you have enough to cover additional living expenses that may arise. Focus on how much you spend a week, a month and annually, and then do your best to not exceed the budget.

3. Avoid/reduce debt. Upon graduating, your goal should be to avoid racking up additional debt. Instead of spending, focus on chipping away at your student loan debt.

4. Start planning for retirement. Does it seem a bit early to think about retirement? Surprise—it’s not. The sooner you can begin saving for retirement, the better your financial future will become. If your new job has a 401k plan, be sure to take advantage of it straight away. Put as much money away as possible now, so that you can enjoy the fruits of your labor down the road.

5. Be thrifty with your money. If you are careful spending your money, chances are you’ll have more of it around. This doesn’t mean all of the fun must be cut out of your life, it just means being creative and finding newer, cheaper ways to have that fun! Save money by packing a lunch instead of going out, utilizing coupons when grocery shopping, and enjoying discount days at movie theaters or other entertainment venues.

Making wise financial choices now can help set you up for success later in life. If you do find yourself in a difficult financial situation, remember that the bankruptcy professionals at Richard Banks & Associates, P.C. are always here to help.