This is the second in a two-post series that will offer new graduates some tips and tricks for how to manage budgets and credit as they begin the next chapter of life beyond school. Here’s part 1.
Your college graduation is an exciting time. It marks your official transition from term papers and late night pizza runs to forging your way in your new career and beyond. It also signifies your entry into the “real” world where you’re most likely going to be the one responsible for bringing home the proverbial bacon and making sure the bills are paid on-time.
In the first part of this series, we covered how to set up a budget for yourself so that you’re prepared to manage your finances well when those fat new paychecks come rolling in. Today, we’re focusing on how to properly manage your credit so that you’re paving the way for a solid financial future.
Rid Yourself of Debt
First and foremost, if you’ve graduated with any sort of credit card or consumer debt in addition to your student loans, now is the time to get serious about eradicating it. You should immediately build your debt payments into your budget, and you should automate the payments.
Another sound piece of advice is for you to pay more than the minimum payment whenever possible. Consider how long it would take if you only paid the minimum on those balances—and how much you’d pay in interest over the course of that same loan. This exercise might be exactly what you need to ensure you’re fully aware of how important it is to rid yourself of consumer debt and stay that way. You’re working hard for that money, make sure it’s used as you see fit!
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Establish Credit
If you’re one of the few who don’t have any credit cards or accounts when you graduate, consider yourself lucky that you’re not burdened by debt—and then go get yourself a card or account to establish your credit. If you ever plan to buy a home and will need a mortgage to do so, every year of solid credit history you can establish now will mean lower costs in the future. As always, be careful not to let frivolous spending and high debts come between you and your dream home.
Resist the Urge to Spend
Simply having credit cards or credit accounts is not a green light to spend yourself into oblivion or to waste precious time, effort, and money on keeping up with your friends who choose to shirk financial responsibility in lieu of new material objects.
By keeping your nose to the grindstone now, you’ll be able to fully relax knowing that you’re on your way to a great financial future that is free from the common credit pitfalls that far too many new grads fall into.
What advice about credit would you give to new grads?
The New Grad’s Guide to Building a Credit History and Budgeting, Part 2 was originally featured on Quizzle Wire
Quizzle.com is the easiest way to get a complete understanding of your credit. Visit Quizzle.com to get your free credit report and score. No credit card necessary!