Financial Tips for Recent College Grads

Financial Advice Student


5 min. read

By: FCU Team

You’ve got the degree and the job to boot. You’re now one of millions of hardworking Americans lacing up their shoes every morning to go out and earn that paycheck. But that step into adulthood doesn’t come without a price, both figuratively and literally. The expenses start to add up, and if you’ve already got debt like student loans to cover, it can feel difficult to stay on top of your finances. Don’t worry, you definitely aren’t alone.

If you’re fresh out of school, or simply in your 20s and working towards financial security, it’s possible achieve your goals so long as you follow these simple steps.  

1. Building Good Habits

There are a number of things you can do while shopping to save money on regular purchases.

Instead of spending more for the name-brand supplies, you can save money by buying the store’s home-brand version of the same product. You can also save money by doing your grocery shopping at stores that feature lower prices and offer BOGO and ½ off deals. For online shopping sites like Amazon, take advantage of free apps that automatically apply coupon codes and give you savings.   

Another great habit to start learning now is avoiding high amounts of debt. Whenever you’re using a credit card, make your payments as soon as possible. Not only does this avoid high-interest payments, but it keeps your credit score thriving by revolving your credit. High credit limits with low utilization will give you an excellent credit score.

2. Budgeting

If you have expenses like rent, bills, and insurance, these are necessary monthly expenses that must be paid. Factor in any other expenses, like food, a gym membership, and Netflix for example, and you’ll find that your money doesn’t go as far as you might think.

If you’re trying to calculate how much money you have on the fly, it goes without saying that you’re going to have a difficult time keeping up.


First, factor in how much money you should be saving. Next, calculate the cost of each of your monthly expenses: student loans, rent or mortgage, utilities, cable and internet, phone, car payments and insurance, and any other regularly occurring expenses you have.

If there are other parts of your budget you can cut back on, such as with food and leisure spending, make sure you can meet your expenses while having enough to save. 

If you’re still in your 20s, there is no harm in living with roommates. In fact, it can actually do wonders for your budget by splitting your living expenses in-half or in-thirds.

There are other places where you can cut back some. Look for contract-free mobile plans that typically charge less than major cell providers. Eat out less and pack a lunch from home. Don’t spend frivolously on impulse purchases and make sure when you “treat yourself” it’s actually a treat.

3. Saving Money

Most necessary to establishing financial security is saving some of the money you make. The general rule of thumb is to save between 10 to 20% of your monthly income, but the lower your bills, the more money you should be putting into savings. If you’re a single person with no kids or dependents, making on average $3,000 per month, target closer to $600, but no less than $300, in savings each month.

If you can afford to save more, then absolutely do so.

Putting away this bit of money should be the first thing you do when you get paid.

Your savings are important in case of an emergency, such as an accident or a major appliance breaking down in your home. You’ll need that extra bit of money to afford those expenses.

The money you save can also go a long way in helping you in the future.

By minimizing your expenses and keeping your debt non-existent, your savings will grow significantly over time. Savings accounts accrue interest, meaning the more money you have, the more money you’ll get. It’s important to find savings accounts and investments that have high yields and low fees.

4. Set-Up a Retirement Plan

Opening a 401k and/or an IRA in your 20s is one of the best financial decisions you can make. If you set up a retirement fund today and don’t plan to use it until 2050 or 2060, you give yourself ample time for that money to grow. Remember, when you retire, unless you have a pension plan through your employer, you’re likely not receiving new income outside of social security. The money you’ll have is the money you saved and invested throughout your working life.

Your employer may have options for retirement and some employers will match up to a certain percentage of the amount of your paycheck you put towards it. Find the best option that’s suited for you.

Considering your age, it’s worth being more aggressive by putting your retirement money into stock portfolios that have higher yields but can be considered more risky due to the stock market’s volatile nature. The older you get—the closer you are to retirement age—the more you should be moving your money into safer investments, but with lower yields.