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I'm a College Grad -- Now What?

Authored By: Genisys Credit Union on 5/18/2016

Group of college graduates


You’ve completed your last paper, crammed for your final exam, and listened to one last boring lecture.  You’re now a college graduate.  Congratulations!  Now, what’s next?

Graduation is an accomplishment.  It’s also an introduction to a state of transition.  It’s easy to make financial mistakes as you complete your degree and move on to the rest of your life.  Here are tips for the recent college graduate.
 

1.    Your first financial priority – the emergency fund. 

Hopefully, release from the rigors of college comes with a steady paycheck.  There are a lot of ways to use those newly freed up funds and no shortage of advice or temptations. 

You might be thinking of investing for your retirement, paying your debts or saving for a car, a wedding, or a house.  Before you can take on those goals, it makes sense to take an important first step – establish an emergency fund.

A good rule is to have funds to cover at least three month’s living expenses available when the unexpected occurs. 

Here are some tips for establishing a good emergency fund.

 

2.    Once you have an emergency fund established, should you pay off debt or save for retirement?

The answer to this question is the ubiquitous “it depends.”  What are your short-term goals?  What kind of debt do you have?


Before paying down your debt, it helps to think about the kind of debt you hold.

Before finalizing this decision, make sure you are considering all the factors of a retirement savings plan.

If you’re able, the best approach may be a combined approach of reducing debt and saving for your future.  How heavily you weight each strategy depends on your personal situation.

 


3.    Avoid the biggest mistake.

The biggest danger facing new graduates is “lifestyle inflation.”

Every product that’s advertised becomes the solution to life’s disappointments.

A 60-inch television would make your evenings more enjoyable, which is how you justify spending $1,000 on it. You get a measure of happiness for a few weeks, but you then quickly get used to it. Then, something else catches your eye that will make your life better. 

The best way to avoid this spending and debt cycle is to make a budget and include room for some luxury expenses. You can spend it every month on dinners out, concerts, or other items. You can also save it for a bigger splurge.

Building space into your budget for this kind of spending helps you stick to a real plan to enjoy life while not overspending.

Make a plan and stick to it.

You likely had a plan for completing your college degree.  Now it’s time to plan for financial success.  Take these tips and get a great start on the rest of your life.

 


Genisys Credit Union has multiple savings accounts suitable for an emergency expense fund.  OR
Make an appointment with a
Genisys Investment Services representative on how to get started with retirement investment.

 

© Genisys Credit Union and www.genisyscu.org, 2016.  Unauthorized use and/or duplication of this material without express and written permission from this site’s author and/or owner is strictly prohibited.  Excerpts and links may be used, provided that full and clear credit is given to Genisys Credit Union and www.genisyscu.org with appropriate and specific direction to the original content



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