Start Saving, Now
Retirement seems like a long way off, but in fact now is the perfect time to start saving. In fact, the younger you are the more valuable each dollar is, because the earlier you begin contributing regularly to a good retirement fund, the less money you will have to contribute overall during your lifetime. The account will grow exponentially over time, essentially earning you free money. And you wouldn’t want to pass up free money, would you?
Don’t Go Wild with Your First “Real Job”
It can be tempting to immediately inflate your lifestyle when you are first making more money on your own that you ever have before. The best course of action, however, is to maintain a lifestyle as close as possible to what you were used to in college, perhaps treating yourself a little bit and allowing for more expenses such as bonding with new colleagues over lunch or building up a daily professional wardrobe. Inflating much more than that, however, is a dangerous game and can easily get out of hand. Plus, you’ll want to make saving a priority, both for long term goals and retirement, and to build up an emergency fund just in case anything should happen or you should find yourself without those new paychecks for a few months.
Like as not you and all your friends lived similar lifestyles in college, within relatively similar means. Suddenly after graduation people you know will be earning wildly different starting salaries. It can be a difficult transition, and it’s all too easy to get jealous or throw away your money trying to keep up with the lifestyles of others. Instead, try to remember to keep perspective. Good friends will always be willing to spend time doing a cheap or free activity instead of a pricey one.
Prioritize Your Commitments
If you graduated with student debt, paying it off should be one of your main priorities. The sooner you are truly free of financial obligations, the sooner you can prioritize what is most important when it comes to building your own life, financially and otherwise.
Go Easy on the Credit Cards
Credit cards can be an excellent tool, and you should absolutely make them a part of your overall financial plan. It is important to keep an eye on the larger picture, however, and never use credit cards as an excuse to buy something that you cannot really afford. If the only way for you to buy something nonessential is on credit, then you cannot afford it, period. Slipping up even a few times can really set you back and place you in a weak financial position early in life
Build Your Credit
With that being said, you should make certain that you are making purchase with a credit card regularly — ones that you can afford and which fit comfortably into your budget. This will help you to establish a good line of credit which will be absolutely invaluable to you later down the line. Credit must be earned and built over time, and you likely do not have much established at this early point in your life. Now is the perfect time to start. Making a point to build your credit is an essential part of any plan for financial health.