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Two recent college graduates celebrate in their caps and gowns.

Graduating from college is a monumental milestone, marking the transition from student life to the professional world. As you turn the page to this new chapter, it’s crucial to establish a strong financial foundation and set yourself up for success.

The experts at Landmark National Bank take pride in assisting recent graduates. This comprehensive guide provides essential personal finance tips and advice for college graduates on what to do with graduation money, how to handle financial planning for student loans, and how to navigate other common financial situations.

Setting Up a Personal Budget

The first and easiest step to take control of your finances is to set up a personal budget. A budget helps you track your income and expenses, ensuring you live within your means and save for future goals. 

Begin by listing all sources of income, such as your salary, freelance work, or side gigs. Next, categorize your expenses, including fixed expenses (rent, utilities, insurance) and variable expenses (groceries, entertainment, dining out). Budgeting tools like Credit Karma or YNAB can make the process easier. Whatever your budget may look like, regularly review and adjust it to reflect changes in your financial situation.

What To Do With Graduation Money

Receiving graduation money from family and friends is exciting, but it’s important you spend it wisely. Here are a few smart ways to allocate your graduation funds:

  • Pay off debt. If you have any high-interest debt, such as credit card balances or student loans, consider using part of your graduation money to reduce or eliminate it.
  • Invest in your future. Consider contributing to a retirement account or investing in a diversified portfolio with your extra cash.
  • Professional development. Use some funds for courses, certifications, or tools that can enhance your career prospects and potentially boost your eventual salary.
  • Treat yourself. Buy yourself something fun! It’s OK to enjoy a small portion of the money for something special, but moderation is key.

How To Build an Emergency Fund

Whether you use graduation money or part of your paycheck, setting up an emergency fund provides a safety net for unexpected expenses such as medical bills, car repairs, or job loss. Aim to save three to six months’ worth of living expenses in your emergency fund. Start by setting a reasonable initial goal, such as $1,000, and gradually increase it. Keep your emergency fund in a high-yield savings account, where it can earn interest while remaining easily accessible.

Managing Student Loans

Understanding student loan terms and repayment options is crucial for new graduates who took out loans. It’s important you choose a repayment plan that fits your finances—federal loans offer various plans. Consider refinancing high-interest loans, but be aware that refinancing federal loans with private lenders may forfeit certain protections. You should also make frequent payments toward the principal to reduce debt faster and save on interest.

How To Build a Good Credit Score

A good credit score is vital to obtaining loans, rentals, and jobs. A few personal finance tips that can help are to pay all your bills on time, use less than 30% of your credit limit, and apply for new credit sparingly. Also, regularly check your credit report for errors and dispute inaccuracies using the free annual reports from the three major bureaus.

Getting Started on Retirement Savings

While you may be many years away, it’s never too early to start saving for retirement! The power of compound interest means that the earlier you start, the more your money can grow over time. Here are some ways to begin:

  • 401(k) or 403(b) plans. If your employer offers a retirement plan, contribute enough to take full advantage of any matching contributions. This is essentially free money that many people leave on the table.
  • Individual retirement accounts (IRAs). Open an IRA if your employer doesn’t offer a retirement plan or if you want additional savings. Traditional IRAs offer tax-deferred growth, while Roth IRAs provide tax-free withdrawals in retirement.
  • Automate your contributions. Set up automatic contributions to your retirement accounts to ensure consistent savings.

Get Expert Financial Insights From Landmark National Bank

After graduation, it becomes time to enter the workforce and take on the world. Partnering with a trusted financial provider like Landmark National Bank can help make financial planning for students easy. Our experts have personal finance tips and advice for college graduates that can help, including resources for personal checking accounts, savings accounts, and more.

Get yourself started today by contacting Landmark National Bank! You can also find a branch near you to meet with our professional team in person.

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