Recently Graduated? Important Steps to Take Today on Your Way to Financial Freedom

Post-grad life is full of all kinds of new opportunities, exciting options, and (hopefully) a paycheck.  It can also be confusing.  Getting started with good financial habits right out of college will pay big dividends as you start your career and post-grad life.

Need some help?  Start with the following steps:    

1.      Decide what your goals are, and write them down.

What is it you want to accomplish?  What are you working toward? What will success and happiness look like to you?  Whether your goals involve a trip to Europe or a house and kids, I’m willing to bet they will require money. 

We can’t know what we’re working toward until we’ve decided what we want.  Take some time to think about your goals, and write them down.  Now that we know where we’re headed, we can decide how to start. 

Once you’ve decided what your goals are, you've got to prioritize them.  I’m sorry to say it, but there is a distinct possibility you won’t be able to do everything at once.  Take those goals you’ve written down, and decide what’s most important to you.  Want to pay off student loans, travel to Europe, and buy a house?  Ask yourself what your timeline is for each of those goals and in what order you want to achieve them.  

2. Know where your money is going, and spend less than you make (aka: Get a budget, and learn to stick to it).

I know, I know, this isn’t a fun one.  But it’s a big part of being a grown up with money, and this is the very best time to start.  You’re going to have to do this eventually; do yourself a favor, and create a budget before you’ve established bad habits and spending patterns.  If you need some helps for getting started with tracking your spending, click here for our 8 part series on budgeting to reflect your values. 

3.      Develop saving and giving habits.

Do you want to be someone who donates money regularly?  How about someone who’s able to save money?  Now is the time to start.  Trust me, this won’t get any easier.  If you have giving or savings goals, now is the time to start building that habit. 

4.     Avoid Debt.

Debt is something you have to pay back.  You might be able to close your eyes and kick the can down the road, but eventually those credit cards, medical bills, and student loans are going to catch up with you.  If you’re not careful, a sickening day when you realize how much you’ve been throwing away in interest payments is in your future.  You don’t want this day to come while you’re staring at mortgage payments and hearing a baby cry in the background. 

As much as you can, stay out of debt, especially consumers debt such as credit cards and personal loans. 

5.  Automate!

If automatic payments are an option, take advantage of them.  I’m talking about bills and rent, giving, saving, retirement and everything in between.  Take the time to set up automatic payments, and you’ll save yourself from the stress and credit dings of forgetting a payment or shortchanging your goals. 

6.      Start saving for retirement.

Retirement? What! You just graduated! Am I crazy?  No, trust me I’m not.  Why, you ask?  Simple.  You’ve got time.  Get that employer match through work, or start a Roth IRA.  You will be amazed at what small contributions now will become once you’re ready to retire.  Your future self will thank you.

Plenty is written on the power of compound interest in other blog posts, but if you want some inspiration, fill out this Investment and Retirement Calculator twice: one with your current age and one with your age 5 years from now.  See the difference?  Let's get started.  

7.     Know your Credit Score.

Use a site like CreditKarma.Com to learn what your credit score is.  This number will be important for getting good interest rates on car loans and home mortgages and will impact things like your insurance premiums and maybe even your rent options. 

Credit not perfect?  Don’t worry too much.  It’s normal for people starting out to have less than stellar credit.  Take action on the recommended steps, pay your bills on time, and make sure you’re establishing a credit history.  The sooner you get working on this, the faster it will improve. 

8. Ask for advice from people you trust.

You’re not the first person to graduate and wonder what to do with money.  Seek advice from people you trust.  This could be parents or relatives, coworkers, friends who are a few years older than you, or a financial advisor.  I’m guessing they’ll be more than happy to answer questions and offer guidance. 

9. Remember, money isn't everything.

Money is a tool. It's what you need to achieve your goals.  Learn now how to set priorities at work and in your personal life and to enjoy what you earn without overspending.  

An important shift happens after graduation; you go from paying money to go to school to (hopefully) earning a paycheck.  You likely also start having more expenses than before.  It takes some time to adjust to this new reality of more money coming in and more money going out.  

Remember what's important.  Saving and managing money well is good, but it's not everything.  Don't forfeit investments in your health, good relationships, family, or your future because you are trying to save or invest everything you earn.   

10.      Take advantage of your twenties.

Your twenties are a great opportunity; do everything you can to take advantage of them.  Need some inspiration?  Meg Jay has a lot of great things to say about making the most of your twenties.  Watch her Ted Talk, or read her book, The Defining Decade.  

Stephanie Vail

About the Author

Stephanie Vail is a member of the Custer Financial Advisors team.  She specializes in helping millennials with financial literacy and planning.  To learn more about Stephanie and Custer Financial Advisors, visit www.CusterFinancialAdvisors.Com or email Stephanie at