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College graduation has come and gone. You are now entering the adult world, one in which you will get a job and become completely responsible for your finances. Now is the time to establish a solid foundation for the future. How should you go about accomplishing this goal?
Avoid Credit Card
Americans frequently carry a balance on their credit cards, and these balances tend to be in the tens of thousands of dollars. This negatively affects credit scores and makes it challenging for those people to get low-interest rates on mortgages and car loans. Don’t overdo it with credit cards. If you already have credit card
Monitor Your Credit Report
As you get older, you’ll set goals that you want to achieve. Many of these goals, such as buying a home, require a good credit score. Only those who can pay cash for everything, including a house and cars, don’t need to monitor their credit score. Everyone else must, as a good credit score leads to lower interest rates. Sadly, identity theft remains a concern. Take advantage of the three free credit reports each year and sign up for a credit monitoring service. Doing so pays off in the long run.College graduation has come and gone. You are now entering the adult world, one in which you will get a job and become completely responsible for your finances. Now is the time to establish a solid foundation for the future.Click To Tweet
Establish an Emergency Fund
Things happen. No matter how much a person prepares for the worst, they can’t control everything. For this reason, every person needs an emergency fund that can be easily accessed to handle this type of situation without turning to a credit card. Most experts recommend having three to six months of living expenses in the bank for this purpose.
Rent or Buy?
College graduates often want to move out of their parents’ home as soon as possible if they haven’t already. Rent if you feel you will move for your career in the next few years. However, if you plan on staying in one area for an extended period of time, consider buying if you can afford to. Have friends rent from you to pay the mortgage and get a head start on your financial future, as real estate is always a good investment.
Save, Save, Save
In addition to an emergency fund, it’s always wise to put money in savings. The first ten percent of every paycheck should go into the bank. Pay yourself first and your financial future will be brighter as a result.
Now that you have a steady income, you can begin buying all of those things you have done without, right? Sadly, the answer is no. Every person needs to create a budget and stick to it so they don’t get in over their head financially. If the budget allows for some of these purchases, that’s fine. However, necessities and regular expenses must always be covered first.
Save for Retirement
Retirement is decades away but now is the time to start saving for your senior years. This gives the retirement fund more time to grow. If your employer offers a 401(k) sign up immediately and be sure to take advantage of employer-match programs and tax savings from 401(k) and IRA contributions.