Life After College
Prepare for Your Financial Next Step
Finishing college or training often brings some major financial changes.
You may be starting a full-time job, earning a different income, moving into your own housing, beginning student loan repayment, selecting employer benefits, or becoming responsible for expenses that were previously covered by someone else.
Before your financial responsibilities grow, take time to understand your new income, expenses, benefits, and goals.
Look Beyond the Salary
Understand the Complete Job Offer
When you're evaluating a job offer, salary is important—but it isn't the only part of your compensation.
An employer may also offer benefits such as:
- Health, dental, or vision insurance
- Retirement plans
- Employer retirement contributions or matching
- Paid vacation and sick leave
- Disability or life insurance
- Tuition or education assistance
- Flexible spending or health savings accounts
- Other employee benefits or discounts
Benefits can affect both your expenses and your overall compensation.
Before accepting an offer, make sure you understand what benefits are available, what the employer pays, what you'll be responsible for paying, and when you're eligible to participate.
Understand Your Take-Home Pay
Your Salary Isn't the Amount You'll Have to Spend
The salary listed in a job offer is your gross income.
Your take-home pay, or net income, is what remains after taxes and other deductions are taken from your paycheck.
Deductions might include:
- Federal and state taxes
- Social Security and Medicare taxes
- Health insurance premiums
- Retirement contributions
- Other benefits you've selected
Build your budget around what you'll actually receive—not your gross salary.
Build Your New Budget
Your Income Changed. Your Budget Should, Too.
Starting a career may give you more income, but it can also bring new expenses.
Your budget might now include:
- Rent and utilities
- Groceries
- Transportation or a car payment
- Insurance
- Student loan payments
- Phone and internet
- Health care
- Household expenses
- Entertainment and personal spending
- Savings
Start with your take-home pay and determine how much you can realistically commit to each area.
A higher income doesn't automatically mean you can afford every new expense at once.
Explore ICAN Budgeting Calculators →
Prepare for Student Loan Repayment
If you borrowed student loans for your education, understand when repayment begins and what you'll be expected to pay.
Before payments are due:
- Know which loans you borrowed.
- Know who services your loans.
- Understand your repayment options.
- Make sure your contact information is current.
- Include your payment in your monthly budget.
- Ask questions if you're having difficulty making payments.
Don't ignore notices or missed payments. If you're struggling, explore available options before the problem grows.
Explore Student Loan Repayment →
Start Building Emergency Savings
Unexpected expenses happen.
A car repair, medical expense, job change, move, or other unexpected cost can quickly disrupt your budget if you don't have money set aside.
Build emergency savings gradually. Even a small amount can help reduce the need to rely on credit when an unexpected expense occurs.
As your finances become more stable, continue working toward an emergency fund that fits your expenses and circumstances.
Make Saving Part of Your Plan
It's easy to increase spending when your income increases.
Before committing all of your new income to housing, a vehicle, subscriptions, entertainment, or other expenses, identify your financial goals.
You may want to save for:
- Emergencies
- Retirement
- A vehicle
- A home
- Travel
- Additional education
- Other short- or long-term goals
Consider making savings a regular part of your monthly budget instead of waiting to see what's left at the end.
Understand Your Retirement Benefits
Retirement may seem far away when you're beginning your career, but starting early gives your money more time to grow.
If your employer offers a retirement plan:
- Learn how the plan works.
- Find out whether your employer contributes or offers a match.
- Understand when you're eligible to participate.
- Learn when employer contributions become fully yours.
- Know how much you're contributing from each paycheck.
You don't need to become an investing expert before you start learning about retirement.
Begin by understanding the benefits available to you and the decisions you're being asked to make.
Protect Yourself With Insurance
As you become more financially independent, you may also become responsible for choosing and paying for insurance.
Depending on your circumstances, that might include:
- Health insurance
- Auto insurance
- Renters or homeowners insurance
- Disability insurance
- Life insurance
Insurance helps protect you from financial losses you may not be able to cover on your own.
Understand what coverage you have, what it costs, what it protects, and what expenses you would still be responsible for paying.
Keep Building Your Credit
The financial habits you establish now can affect future opportunities.
Continue to:
- Pay bills on time.
- Keep debt manageable.
- Use credit cards responsibly.
- Review your financial accounts.
- Monitor your credit reports.
- Protect your personal information.
Good financial habits become increasingly important as you consider larger financial decisions such as renting an apartment, financing a vehicle, or purchasing a home.
Learn About Credit Card Management →
Set Your Next Financial Goals
Your first paycheck isn't the finish line.
Think about what you'd like your money to help you accomplish over the next few years.
Your goals might include:
Short Term
Build emergency savings, pay down credit card debt, or save for an upcoming expense.
Mid Term
Pay down student loans, purchase a vehicle, move, or save for additional education.
Long Term
Build retirement savings, purchase a home, or work toward other major financial goals.
Your goals will change as your life changes. Review them regularly and adjust your financial plan along the way.
Build Your Financial Foundation
As you move from education into your career:
Understand your income.
Know what you'll actually bring home.
Know your expenses.
Build a budget based on your new responsibilities.
Prepare for debt payments.
Understand what you owe and your repayment options.
Save for the unexpected.
Build financial flexibility over time.
Use your benefits.
Understand what your employer provides and what decisions you need to make.
Plan for what's next.
Set financial goals and revisit them as your career and life change.
The financial skills you've been building don't end when you leave school. They're the foundation for the decisions you'll make throughout your adult life.
