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Financial Advice for Recent Grads

Published June 13, 2016

Being a recent college grad can be hard, especially this day and age! (No matter what others tell you about millennials being “whiney.”) But it doesn’t have to be an especially frightening time because of all of the advice and resources available to us. Below are several situations that recent college grads often encounter and our advice on how to best approach them.

Situation: Congratulations, you’ve graduated! But you don’t have a job… First of all, don’t beat yourself up and don’t feel like a “failure” or alone. There are many recent (and not-so-recent) grads in the same predicament.
Our advice: Downgrade your lifestyle until you find a gig. This might mean moving back in with your parents if you can (not ideal, but certainly not the worst case scenario) – If moving back home is not an option, opt for a cheaper apartment. You may want to get a part-time job for extra cash while you look for an actual career, but keep in mind that a 40+ week in a field unrelated to what you want to pursue may leave you too tired to seek a better job.

Situation: Moving!
Our advice: Be prepared for the down payment to secure a place, which could be as much as the first and last month’s rent plus an additional security deposit. If you can’t come up with the money on your own, the best option is to seek help from family or close friends. If you’ve managed to find a job, then you might also check if they reimburse moving expenses or can provide an advance on your paycheck. We advise you do not turn to payday lenders or cash advance operations, since their fees and interest rates are ridiculous and you’ll struggle to repay them.

Situation: You’re employed! And maybe thinking: “Whats’s a 401k plan?”
Our advice: Take advantage of your company’s 401k plan, which allows a portion of your paycheck to be set aside for retirement. If you have a variety of options, make sure to choose a fund that has a low expense ratio. Even if your company does not offer a 401k plan, you can still contribute to an IRA and earn a similar tax advantage. Try to now blow your entire paycheck. The longer you wait to start saving, the more difficult it will be to retire comfortably.

Situation: Thinking about insurance?
Our advice: Auto insurance: If you’re a driver and haven’t been paying for your own car insurance until now, you should consider starting. You might be more comfortable staying with your parent’s provider, but they won’t always offer you the best rates, so we recommend comparing before you commit. Finally, if you don’t actually own a car but do borrow one sometimes, you don’t need full-blown coverage, but you should consider a non-owner policy to help cover your liability in case of an accident.
Health insurance: If you’re under age 26, thanks to the Affordable Care Act, you are still able to remain on your parent’s insurance. However, any dental or vision insurance you previously received under a parent’s employer-based plan could be taken away once you graduate.
Renters insurance: If you live in an apartment, you might not have to worry about damage to the building, but your personal possessions are different. Personal losses due to fire, flood, theft, etc. are not likely to be covered by your landlord’s insurance, so consider renter’s insurance to protect your stuff.

Situation: Paying off student loans
Our advice: Create a distinct plan of action, which can begin with you getting priorities in order: As a general rule, you’ll want to pay back your highest interest loans (like any private loans) as soon as possible, so focus any extra repayment ability on those. We also recommend you know your federal repayment options, there may be a few key ways to help relieve the burden of student loan payments in certain situations: deferment and forbearance. Lastly, consider consolidation. If you have any private loans, this can help lump them all into one (potentially lower) monthly payment.

Situation: You got your first paycheck!
Our advice: Perhaps investigate your best credit union or banking options. When you are first starting out, it’s best to seek out a free checking account, with no monthly fees or minimum balances. These are common at local institutions like credit unions and community banks, but you can also find online checking accounts if earning interest on your checking balance is important to you. Don’t sign up for any account without first understanding the fees you might face, and how to avoid them. Also, don’t disregard a small bank or credit union just because they don’t necessarily have a big name – For example, credit unions partner together to give consumers wider ATM access throughout the country.

For more information on how a credit union could help you, please visit us in person at a location near you or at

The preceding information was repurposed from the NerdWallet Inc. article Back

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