Congratulations, you graduated from college! Now, it’s time to get yourself on the right track financially. To make it easier for you, I've put together nine money moves you should make right now. You don't have to do them all today, you can pick and choose the ones that make sense and do them first, but each of these money moves is going to set you on the path of financial prosperity.
And best of all, many of them are absolutely free.
[Slideshow: 10 Ways to Reduce Your Summer Utility Bills]
Check Your Credit Reports
You can get a copy of your credit report from each of the three credit bureaus once every twelve months for free. You won't get access to your FICO credit score, but that's not as important as checking your credit reports for errors. Visit annualcreditreport.com to request a report from Experian, Equifax, and TransUnion. Be sure to dispute any errors you see immediately, as the resolution process can take quite some time.
Open an Online Savings Account
Interest rates on any kind of bank account, be it CDs, savings, or money market, are really low. That's why it's important for new graduates to open an online savings account. Online savings accounts pay far more in interest compared to larger brick and mortar banks and if you're comfortable sharing photos of your weekend on Facebook, you're probably comfortable with banking entirely online.
Contribute to your 401(k)
If your employer offers a 401(k) retirement plan, take advantage of it. Contributions to a 401(k) are tax deductible and your earnings grow tax free, you only pay taxes when you take disbursements in retirement, which will be very far in the future. If your employer offers a contribution match, it's a no brainer. Take the free money!
Use Education Tuition Reimbursement
This is another case of your employer dangling out free money, it's just a matter of taking it. Many companies offer education tuition reimbursement programs where you can go back to get post graduate degree and your employer will foot the bill. You may be tired of school at this point but now is the best time to pursue even higher education (if it makes sense). It's much easier to finish a graduate degree in your 20s than to wait until your 30s or 40s, plus you'll reap the benefits for a much longer time.
Start a Budget
One of the nice things about graduating is that you get an almost fresh start on your finances. You're probably starting a new job, moving to a new residence, and your budget will be reset, even if you haven't been keeping one. Now is a great time to start budgeting, tracking what you spend, and learning your own spending habits. A budget can help you save towards your goals so you can take that summer vacation without guilt or buy a new iPad because you've kept your grocery budget in line.
Open a Roth IRA
A Roth IRA is a retirement account that grows tax free and is not taxed when you start taking disbursements. The trade off is that your contributions are not tax deductible, so you start with a little less but you are never taxed on the gains. The Roth IRA contribution limit is pegged to inflation, which for 2010 is $5,000 ($6,000 if you're aged 50+), and is shared by Traditional IRAs.
Build Your Professional Network
Your professional network, much like your social network, is one of your most valuable assets. Just as you would lean on your friends for help getting out of a jam, your professional network will prove equally invaluable. Many hires are based on referrals, existing employees vouching for new hire candidates, and many freelance projects are based on existing business relationships. Start to build your professional network today and you will reap the benefits in the future.
Sign Up for Loyalty Programs
One of the first things I did when I started working was save up money for a short 3-day Carnival Cruise. I had never been on a cruise before so I thought it would be a nice treat. The first thing I did was sign up for Carnival's Past Guest loyalty program, which meant discounts on subsequent cruises. I didn't know if I was going to go on another cruise but taking advantage of loyalty programs, whether it's at the grocery store or on a cruise line, may pay dividends down the road for only a small amount of effort.
Shop around for Insurance
If you're moving to a new area and you have a car, you will want to shop around for new car insurance. Car insurance premiums are, in part, based on the geographic region and some insurers are more competitive than others. Take a few minutes to update your information and compare it with quotes from competitors, you may find that you can get the same coverage for much less.
Jim Wang tackles money issues daily at personal finance blog Bargaineering. For more tips for graduates, check out his weeklong 2010 New Graduate Guide filled with tips on how to build a financial foundation, find your first apartment, and decoding your paycheck.