11 Money-Smart Steps All Grads Should Take

Now is the time to get taxes, insurance, and other grown-up items in order.


Graduation season is upon us, and now is the time for soon-to-be and recent graduates to start thinking about what their futures hold. Graduating can be a scary and confusing time for young adults who aren’t quite sure how to make the transition from college life to the real world, but here are eleven tips to help make the transition a little easier.

[In Pictures: 10 Smart Ways to Improve Your Budget.]

1. Get Educated About Taxes

The government is going to take money out of your paycheck, so you might as well learn about the different types of taxes, brackets, and deductions. By educating yourself about taxes, you can learn where your money is going and how to better shelter your income, ultimately keeping more money in your bank accounts.

2. Be Careful With Credit Cards

If you have credit cards, don’t overuse them, no matter how tempting it is. Only spend money you have and be sure to pay off your balance in full each month. If you aren’t capable of exercising restraint when it comes to credit cards, use a debit card or only pay for things with cash. Also, check your credit score on a regular basis to make sure it’s accurate. (See also: Student’s Guide to Credit Cards Use)

3. Sign Up For LinkedIn

LinkedIn is like Facebook for professionals. It enables you to connect with your personal and professional contacts, showcase your resume, and make new connections that can ultimately help you find a job. Take the time to fully fill out your profile so you can be more marketable to potential employers.

4. Start an Emergency Fund

An emergency fund—money stored in case of an unexpected occurrence such as a job loss or sudden medical problem—is absolutely vital given the state of the economy. If you can, try to stash away some money each month so you have funds to fall back on should you lose your job (or, if you haven’t graduated yet, until you land your first job). Your goal should be to have enough money to support yourself for at least a few months – but any bit can help.

5. Get Educated About Retirement

It is never too early to start thinking about retirement. Educate yourself about 401(k)s and IRAs so you can start getting prepared. If you currently have a job or when you get one, find out if your company does any 401(k) matching. If they do, take advantage of it—it’s essentially free money.

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6. Make Your Facebook Account Employer-Friendly

Go onto your Facebook profile and make it employer friendly. This means removing all inappropriate pictures and information or, at the very least, making your profile as private as possible so potential employers cannot see pictures from your crazy weekend in Vegas or your spring break trip to Cancun.

7. Create a Budget

Now that you are graduating, your budget will be somewhat different than it was while you were in school. Create a basic budget showing how much you make and how much you spend on different budget items. Make sure your income is more than your expenses. If it isn’t, figure out how to reduce your expenses so you are living within your means.

8. Start Eliminating Debt

If you acquired debt while going to school, be sure to factor that into your budget. Figure out how much you can afford to pay each month, then start chipping away.

9. Get Insured

Make sure that you are either a) still on your parent’s health insurance after graduation or b) your employer is offering you health insurance. Otherwise, consider getting your own health insurance. Also, find out how your car insurance policy may change after you graduate and if you can get any auto insurance discounts. If not, do your research and see if you can get a better policy for less at a different insurance company.

10. Update Your Resume

Make sure the relevant experience for the jobs you are applying for is showcased on your resume and consider tailoring your resume for each job application. If you can, take your resume to your school’s career center and have them critique it for you. Most colleges are also willing to assist graduates with their career search up to one year after graduation.

11. Be Frugal

Once you start working hard to make money, keep more dough in your pocket by being frugal. This can be as simple as clipping coupons or only buying items on sale to looking for used furniture and more. Anything you can do to save money is always a plus, so learn how to implement frugal practices in your day-to-day life.

Ashley Jacobs is the college correspondent for personal finance blog Wise Bread. Follow her latest tweets on @CollegeCents.