Life After College
The skills you learn in college – academic, social and financial – will be useful throughout your life. As you move from college to career, set financial goals and make a plan to reach them.
As a college graduate, you will:
- Evaluate job offers and benefits packages.
- Begin making savings and investment choices.
- Consider insurance for your health, your life and your belongings.
- Manage student loan repayments.
- Budget your new income.
These tips can help you achieve financial success:
- Create a monthly budget for life after college and stick to it. On a starting salary, you may be short of cash, so find ways to cut everyday costs and living expenses. Use a budget calculator to set up your budget.
- Understand employer benefits packages. A new employer may offer benefits that pay part or all of your medical and insurance expenses and that help you save for retirement. Some common types of benefits are:
- Health insurance to help pay for medical, vision, dental and prescription coverage.
- Disability insurance to help make up for lost income if you can't work because of an injury or sickness.
- Life insurance to pay a lump sum to your family or others you name if you pass away while employed there.
- Retirement benefits, like a 401(k) plan, that let you contribute part of your pretax income to retirement savings. An employer might match some of your contribution, although you may need to work a certain amount of time before you're eligible for the match.
- Vacation and sick time based on the amount of hours or days you work in a pay period or on the number of months or years you've worked for the company.
- Other perks like day care programs, tuition reimbursement, fitness facilities or employee discounts.
- Start saving and investing right away. Include savings in your monthly budget and make this a habit for life. If you invest early, you have a greater chance of building up substantial earnings over your lifetime because the interest begins earning interest. Investment plans include:
- Savings accounts with your bank. You earn a small amount of interest, but you can withdraw your money anytime.
- Certificates of Deposit (CDs) with a higher interest rate. You basically loan your money to the financial institution for a set number of months or years. You'll have to pay a penalty for withdrawing your money before the time is up.
- Bonds, which vary in their risk level and earning potential. You earn a specified rate of interest for loaning your money to a corporation, federal agency or the government. You earn interest until you are repaid your original investment amount.
- Stocks and mutual funds that have a higher earning potential but also higher risk. Value fluctuates with the market, so you may make a lot or lose some or all of your money.
- Create an emergency account. Try to keep at least three to six months' expenses in a savings account for an emergency.
- Pay all your bills, including student loans, on time and in full to keep your good credit score and to avoid late fees.
