How to Ensure Financial Success After Graduation

College graduation season is the perfect time to get your finances in order. If you’re lucky enough, you’ll get a full-time, well-paid job right out of college, but what if you’re not? Will you even be able to repay your student loan? You might, provided that you stick to basic tools to ensure your long-term financial success.

1. Put Yourself on a Budget

Post-graduation life can bring so many financial challenges, especially when you have to move to another city to embark on a new career. You may face a completely different cost of living and if you don’t create a budget to balance your costs, soon you might get into debt. There’s no one-size-fits-all formula for balancing your budget but you can try at least to keep all your costs reasonable, even if it means tightening your belt.

2. Use Your Credit Card Responsibly

Most students get their first credit cards in college and often face the temptation to overspend. As a result, most of them have an average of $3,000 in outstanding credit card balances by the time they graduate. What’s the reason? Poor financial management and irresponsible spending. Responsible use of your credit card will help you establish a solid credit rating and avoid financial problems in the future. How? If you keep track of your spending and limit the number of cards you get, your financial future won’t end up a horror story.

3. Start Repaying Your Student Loan

Student loan debt is the second most prevalent form of consumer debt in the US. It has grown by 275% to a total of $904 billion since 2003. The numbers are really daunting but what’s worse, 25% of students miss the first payment on their student loan or make it after the payment deadline. Thus even if you find a well-paid job, you might end up spending too much of your high salary trying to dig out of a debt hole. How to avoid it? When tackling any kind of debt, planning ahead is the most important thing. Try to make your payments ahead of schedule so you have to pay back less when the time comes.

4. Start Saving

Establishing a savings account is probably the last thing on a new college graduate’s mind. However it is the best way to handle emergency situations as well as to reach your financial goals. How much should you save? Most experts recommend saving 10 to 15% of your income. If you think it’s too much, the general rule of thumb is to save as much as you can. You can always ask your employer to deposit some of your paycheck into your savings account. Or you can deposit it yourself when paying your monthly bills.

Regardless of your financial situation, a sound post-graduation financial plan is all you need. Whether it’s a savings account or a budget plan, you’ll always have financial relief if something catastrophic happens.