You did it. You graduated. You tossed your cap and drank champagne, and now it’s time to...adult. Yikes. You may be feeling overwhelmed, and that’s okay. Navigating life after college is hard, but like college, you can take it one lesson at a time.
Here are some money tips to help guide you through the transition:
1. Get acquainted with your student loan.
Figure out how much money you owe and when you need to start paying. Some student loans have a grace period of about six months, while others require payments to start right after graduation. Either way, mark your calendar! If you have multiple student loans, keeping track of due dates and minimum payments can be confusing. In this case, it might make sense to consolidate your loans into one monthly payment. With a Summit Consolidation Loan, you may also be able to lower your interest rate and save some money in the long run.
2. Establish a monthly budget that includes saving (even just a little).
Once you’ve landed a job and gotten into your new routine, create a monthly budget. Filling out a budget tracking worksheet is a great place to start. We recommend tracking your spending every month for at least three months to get a sense of your new financial life. Once you’re in the money mindset, set a monthly savings goal. It can be small. Like, really small. You can even set up automatic savings deposits from your paychecks so you don’t even have to think about it.
3. Start contributing money to your retirement. Seriously!
Retirement may seem like a far-off concept when you’re in your twenties, but the sooner you start saving, the more time your money will have to grow. Contribute to your retirement account at least as much as your employer will match. If your employer doesn’t offer a retirement plan, open an individual retirement account (IRA). Does talk of retirement, stocks and taxes have your head spinning? You’re not alone! Schedule an appointment, and we can talk you through it.
4. Pay more than the minimum on your student loan.
You’re making money moves, and as you advance in your career, it may be a good time to prioritize loan repayment. Paying more than the minimum on your student loan is a good investment that can save you money in the long run, but don’t press pause on your money saving habits to do so. Just pay more when you can. You can always go back to paying the minimum for a few months if your budget gets tight.
5. Open a secondary savings account.
Life after college will probably look a little different five years out. The idea of adulting isn’t as foreign, it’s just life. You could even be thinking about bigger purchases like buying a car or a house. Now is a good time to open a secondary savings account, so you can start saving for those goals. You may even want to read up about different types of savings accounts to see if you could start earning a higher savings rate on the money you’ve already set aside. Face it: You’re a financial nerd now.
Life after graduation is challenging enough without having to stress about your finances. If you need help managing your money after college, schedule an appointment with a Summit financial eoach, and we’ll be more than happy to help you develop a strategy that fits your needs and lifestyle.
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