Financial Fundamentals: 6 Tips for College Graduates 

At the crossroads of a new direction in life, recent graduates are putting education behind them and looking forward to new experiences ahead. Whether the path is clear or they are still exploring options, it's important to keep an eye on the financial fundamentals.

Start Early on the Road to Financial Security
Stepping out into the big world can be exciting, challenging, satisfying and rewarding. Each person’s direction will depend on personal goals, needs and interests, and day-to-day choices can have a major impact on long-term financial security. If you want to help someone who is just starting out, encourage that person to establish good financial habits as early as possible to set a course for a successful future. Here are important nuggets of financial advice you can share with those who are transitioning to independence:

  1. Start with Your Goals
    Imagine your dream life. How do you want to spend your time? What are your long-term desires? Write down specific goals and timeframes in which you’d like to achieve them. Once these are defined, you can focus on how to make them happen. Research and connect with people who are living the life you want. Find out about their experiences (the good, the bad and the ugly) and consider what steps you would take to accomplish the same results.

  2. Get Out and Steer Clear of Debt
    Stay vigilant to keep debt from disrupting your financial plan. Avoid debt whenever possible, and if you use credit cards, be sure to pay off the balance each month. If you have federal student loans, visit the National Student Loan Data System for information on your loans and loan servicers, and answer your repayment questions at the Federal Student Aid website. For all financial obligations, be clear on the balance due, interest rate, repayment options and costs involved. Pay on time to avoid late fees, higher interest rates, and impact on your credit rating. A trusted adult or financial advisor can help you decide the best plan for your specific situation.

  3. Establish and Stick to a Budget
    Working within a budget is the best way to ensure you can meet your obligations and goals, especially in the early stages of your independent life. Keep expenses down by making practical lifestyle choices, whether it’s sharing housing or using public transportation to save on car expenses. Live below your means, keep a careful eye on your cash flow and know exactly where your money is being spent. Online resources such as can be very helpful in recording expenses and keeping your finances on track.

  4. Protect Against Risk
    Once you have financial commitments, you need to take responsibility for protecting loved ones from risks to your health, income and assets, and ensure your obligations can be met even if something unexpected happened to you. Be sure you have health insurance to cover hospital costs and other essential health care, even if your employer doesn’t provide it. Talk to a financial representative about life insurance that would cover your debts if you were to die unexpectedly, and disability insurance to provide essential income if you became injured or ill and unable to work.

  5. Save Early and Often
    Before you distribute your expendable income elsewhere, pay yourself first. Establish a habit of transferring even a small amount to savings from every paycheck, ideally through your employer. As soon as you can, establish a relationship with a financial advisor to put your financial goals into a financial plan. It’s never too soon to begin saving for long-term goals such as retirement or a home, and a financial representative can help you decide how best to get there.

  6. Take Full Advantage of Employee Benefits as Soon as Possible in Your Career
    Working for an employer that provides health insurance, disability, life insurance and 401(k) plans is a tremendous advantage for anyone, but especially for someone just starting out. Put as much as you can into your retirement plan as soon as possible. The longer your retirement savings can grow, the more it will multiply due to the benefits of compounding.

Venturing into independence is a time of exciting possibilities. Taking the right steps early to establish your financial foundation sets the course for an optimistic future.