As a new college graduate, you enter a new life stage, where you are transitioning from school life to work life. You’ve worked hard and excelled in college and now you need to know how to handle your money. If your college experience has been similar to mines, you probably had a limited amount personal finance education throughout high school and college.

So, how should you handle money as a recent college graduate? Here are some key steps to handling your finances effectively.


As a new college graduate, one of the first things you have to work on is your money mindset. Money is a tool that you can master and use it to reach your life goals. It’s important to define your core values and determine the goals that you have for your life. Take time to educate yourself about personal finances by reading personal finance books and blogs, or listening to personal finance podcasts.  Ensuring that your circle includes others who can provide accountability and encouragement is also important. This will help you to align your money with your personal values and goals.


Even if you don’t have a job, yet and you aren’t making any income, you need to know where you stand financially. Add up all your assets (cash, vehicles, investments, etc) and subtract all of your liabilities (credit card debt, student loan debt, personal loans, car loans, etc).


Once you know your net worth, you’ll know exactly where you stand financially. If you happen to have a negative net worth, even a large one, don’t let that define you. This is just a snapshot of your personal finances, today, and you have the ability to grow your net worth, by reducing your liabilities and increasing your assets ,over time.


This is one of the best pieces of advice that I took from one of Michelle Singletary’s many features on NPR. When you start out in your career, you should sign up for any retirement plans you are eligible to participate in, especially if a company match (read “free money”) is provided by your employer. Even if your employer does not provide retirement benefits, explore other options like a Roth IRA, Traditional IRA or MyRA. Your future self will thank you.


We all know that you need a budget. Instead of fretting about how many lattes you buy or weekend brunches you attend, focus on finding a balance for your money. Keep your ‘must have’ expenses low (aim for no more than 50% of your income), dedicate at least 20% of your income to savings and long-term investing, and allocate the rest to short-terms savings, additional investing, paying off debt and have fun with the rest! Of course, you should adjust these percentages based on your personal values and goals, but always maintain a balance, this is key.


Even as you are embarking on a new career after college, consider getting a side hustle. Learn new skills or use your innate talents to generate income on the side. This can provide an outlet for creativity that you may not have at your 9-to-5 and provide additional income to help you beef up your emergency fund, investments, and reach your financial goals faster.


The limit on your credit card is not your money. When you buy with credit, you are using  funds that belong to someone else and you are obligated to pay it back. It’s best to spend within the bounds of  the money you actually have in the bank.


Insurance provides protection for your assets, including one of your most important assets, which is your ability to earn an income. Understand the different types of insurance you need and getting the appropriate coverage. You may not only need life insurance, but rental or house insurance, car insurance, long and short-term disability insurance, and long-term care insurance to name a few, also.

That’s it for a quick run down!

If you are a recent college graduate what else would you like to know about handling your money? For long time graduates, what do you wish you knew about money when you graduated?

(Edited July 13, 2017)

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