10 Financial Steps to Take After Graduating From College

College graduation can bring a big sigh of relief. After all, the hard work of earning a degree is behind you.

But that doesn’t mean there aren’t new challenges waiting on the horizon. One of the biggest may be learning how to navigate managing your money.

Consider this: 55% of new college grads say the number one graduation gift they’d like to receive is financial help, according to an Offers.com survey. Many grads also find themselves second-guessing the money decisions they made in college. For example, 47% of recent graduates polled by Fidelity Investments report feeling stressed over the amount of student loan debt they acquired while in school.

The good news is there are things you can do right after graduating from college to start building a solid financial foundation. As you hang up your cap and gown and prepare for life after college, here are 10 money to-dos to tackle.

1. Review your budget

Hopefully, you picked up the budgeting habit while you were in school. According to a Harris Poll survey conducted on behalf of Ally Bank, making a budget is something 9 out of 10 students surveyed learned to do as part of their college experience.

How you budget may change after graduation if your expenses change. For example, if you’re going from living at home with Mom and Dad to renting your own apartment, that’s going to shift the numbers. Likewise, you may have more money on the income side of your budget if you’re starting your first real job.

Once the graduation celebrations wind down, check your budget to gauge how your income and spending might change and what adjustments you’ll need to make. For example, you might have a brand-new budget category to add: debt repayment for student loans.

2. Create your student loan payoff plan

Americans owed $1.5 trillion in student loan debt, as of March 2019, including about one-third of young adults aged 18 to 30. If you’re one of them, paying off those loans should be a top financial priority after graduation.

Daniel J. Mendelson, CEO and founder of BYE Student Loan Debt, outlines a five-point plan for getting started:

Assess your situation – Add up all loan balances and make note of the interest payment and minimum monthly payment for each one.

Create a budget – Determine whether your current budget allows you to make the minimum payments to your loans and still have enough left to cover basic living expenses.

Set a goal – Set yearly goals for how much student debt you want to pay off.

Restructure and refinance – Consider consolidating and/or refinancing your loans to get a lower rate and streamline monthly payments.

Eliminate – Stick to your plan and monitor your debt payoff progress regularly.

“By following the process above, student borrowers can identify if they have the ability to accelerate their repayment process,” Mendelson says. “The obvious reason to accelerate repayment is that it allows thousands of dollars in savings of interest payments.”

Talk to your loan servicers about repayment options, as well as forbearance or repayment options. It may also be worth looking into federal student loan forgiveness if you’re planning a career in public service. The sooner you get started with managing your student loans, the faster you can get them paid off. 

3. Open a savings account

As a freshly minted college grad, you may be embarking on the early stages of your career. Bringing in a bigger paycheck is a great reason to open a savings account for emergencies.

In terms of how much to save, you might aim for $1,000 to start. From there, you can work your way up to saving three to six months’ worth of expenses for rainy days.

When deciding where to keep your money, shop around for the best savings account based on the annual percentage yield (APY) you can earn, monthly fees and minimum balance requirements. Also, consider taking a look at a money market account or a certificate of deposit (CD) for long-term savings.

With a money market account, you can earn a competitive rate on savings while enjoying check-writing privileges. A CD can also offer competitive rates, but just keep in mind you may pay a penalty for withdrawing money before your CD matures.

4. Open a credit card if you haven’t yet

A credit card can be a handy way to make purchases when you’re short on cash, not to mention you could earn valuable rewards when you spend. If you don’t have a credit card yet, you could be missing out on rewards as well as opportunities to build a positive credit history.

The key to opening a credit card after graduating is using it responsibly. That means paying your bill on time each month and maintaining low balances on your card. Only 51% of students who open a card in college, for example, plan to pay in full each month. Carrying a balance can make paying down credit cards more difficult if you’re subject to a high annual percentage rate.

If you’re looking for your first credit card after college or your next one, take time to compare the best credit cards. Consider the annual percentage rate (APR), fees and rewards to make sure the card you choose fits your spending style. Reading credit card reviews is a good place to start exploring the best credit cards and their features.

5. Review your credit report and scores

Your credit report includes information about your credit history and use. Your credit score is a three-digit number that’s based on the details in your credit report. Both are important if you want to buy a car, refinance student loans or eventually get a mortgage after graduation.

You can check your credit report from each of the major credit reporting bureaus (Equifax, Experian and TransUnion) for free through AnnualCreditReport.com. If you have a rewards credit card that offers FICO credit score access, you’ll be able to see your score for free. Otherwise, you may be able to view your score for free through a monthly credit monitoring service.

6. Consider using personal loans to build credit

Part of your FICO credit score, which is the scoring model most widely used by lenders, is based on the types of credit you’re using. Having a mix of both revolving credit (i.e. credit cards) and installment debt (i.e. loans) can help you work toward a well-rounded score.

If you already have a credit card, you could also use a personal loan to improve your credit after college. Credit builder loans, for example, allow you to borrow small amounts and repay them over time. As you repay the loan, the payments are reported to the credit bureaus, potentially giving your score a boost.

When comparing personal loans, the rules are similar to comparing the best credit cards. Check the interest rates, fees and loan terms to find the option that best fits your needs and post-college budget.

7. Shop carefully for auto loans

Buying your first car might be on the agenda after graduation, but take time to do your research first. For example, start by setting your car-buying budget and decide whether you’ll pay in cash or borrow to make the purchase.

If you need financing, get to know your options for auto loans. Using the dealer’s in-house financing, getting auto loans from a bank, or getting a loan through an online lender can make a difference in the fees, interest rate and terms you’ll be approved for.

Finally, think about how much you can afford to put down on a new or used car. The more cash you can offer upfront, the less you’ll have to finance, which means more money you save on interest.

8. Learn the basics of home-buying

Buying a home may be a few years in the future, especially if you have student loans to pay off. According to real estate site Clever, 48% of grads say they delay home buying to pay off their loans first.

That doesn’t mean, however, that you can’t learn about home buying before you’re ready to do it. For example, it’s helpful to understand things like:

  • What a mortgage is
  • Different mortgage options
  • How mortgage rates work
  • Why credit scores matter when getting a mortgage
  • How much money you’ll need to put down on a home
  • What closing costs are and how much money you’ll need
  • How to decide how much home you can afford

Getting to know the basics of home buying can help you be fully prepared once you’re in a position to become a homeowner.

9. Take advantage of financial perks at work

Starting your first adult job is exciting — after all, you might be making more money than you ever have before. But don’t overlook some of the other financial extras you may enjoy as you climb the career ladder.

For example, your employee benefits package might include:

  • Access to a 401(k) or similar retirement plan
  • Health insurance
  • Life and disability insurance
  • Wellness programs
  • Student loan forgiveness or reimbursement
  • Special discounts

Any of these perks have the potential to help you save money and improve your financial life after college. If you’re not sure what your benefits package includes or how to take full advantage of these perks, check with your human resources department to see what’s on tap.

10. Set clear financial goals

Last but not least on the list of financial steps to take after graduating college, think about what you want to achieve in the big picture. For example, would you like to become part of the F.I.R.E. movement and achieve financial independence and retire early? Or do your financial goals revolve around paying off all of your student loans ahead of schedule or landing a six-figure job in the next five years?

Consider what goals you’d like to achieve financially, then come up with a plan for achieving each one. Specifically, make your goals S.M.A.R.T. For example, say your goal is to save a starter emergency fund. Your S.M.A.R.T. goal might look something like this:

Specific – Making your goal specific, using a number. So, you might aim for saving $5,000 in an emergency fund.

Measurable – Your goal should be measurable, meaning you can track your progress month to month. For example, you could check your savings balance on the first of every month to see how much you’ve saved and where you might need to adjust to reach your goal.

Actionable or achievable – Actionable means you can take specific action to reach your goal. For example, one key action for saving $5,000 may be reviewing your budget to see what you can realistically afford to save monthly. A second action is opening a dedicated savings account, while a third is setting up automatic transfers to savings each payday.

Realistic – Your goal should be realistic, based on your financial situation. You may want to save $500 per month, but don’t assume that you can without first reviewing your spending and income.

Time-bound – Give your goal a deadline, say 12 months or 18 months. This helps you stay motivated and makes it easier to measure your progress over time.

Give yourself a clear money blueprint to follow, by thinking S.M.A.R.T. with your financial goals. That makes for a brighter financial future and a smoother transition as you move from college to the real world.


Rebecca Lake

Personal Finance Contributor

Rebecca Lake is a personal finance expert specializing in banking, saving and investing. Her work has appeared online at MyBankTracker, MoneyRates.com and CreditCards.com. She’s a current contributor to U.S. News and World Report and has worked with major banking brands, including Discover and Citi. She graduated from the University of South Carolina and lives in coastal North Carolina with her two children and an assorted collection of pets.