Going from part time job or internship money, to full time job money is a massive change! For anyone else at their first post grad job, you may wonder, what do I do with all this money? Or, where did all my money go? Understanding your finances now sets your money foundation for the rest of your life! And certainly is important to building your dream life post graduation. There is so much information out there; it’s a bit overwhelming. In this article, I’ll go through the most important post grad money tips I wish someone taught me. Also, we’ll go through questions you should ask yourself to set yourself up for success!
Disclaimer!
The financial tips and advice shared in this post are based on my personal experiences and what has worked for me. I am not a certified financial advisor, and this content is not intended to be professional financial advice. Please consult with a certified financial advisor or other professional before making any major financial decisions.
Post Grad Money Tips:
Credit Cards
The first question you should ask yourself is, do you have a credit card? If not, do some research to look into getting one. Credit cards are a great tool, and one of the BEST post grad money tips, but NEED to be used responsibly.
If you want to have the ability to buy your own car, rent an apartment, or down the line buy a house, you have to have a decent credit score. A credit score is like your adult GPA. It shows to companies how responsible you are with money. There are a few things that go into your credit score like if you’ve paid on time in the past, how much debt you have, the length of your credit history, if you’ve applied for lots of cards lately, and if you have a mix of credit (credit cards, student loans, personal loans, etc).
For all you first time credit card people, the most important thing is to pay on time and in full. You should treat a credit card like a debit card. Do not spend any money you do not have. Don’t let any balances carry over to the next month. Over time, doing this month after month, it will show that you aren’t a high risk, raising your score.
The Cards I Have:
My parents wanted to make sure I had a good credit score, so when I turned 16, I got added as an authorized user on their credit card. I only used this when I went grocery shopping for them or in an emergency. This helped my length of credit be long already by the time I applied for my first card.
Discover It
My first card was the Discover It Card which I got my sophomore or junior year of college. It has rotating points categories every quarter. The categories are Restaurants and drug stores, gas stations/electric vehicle charging or public transport, Walmart and grocery stores, then Amazon and Target. So depending on the month, these are the purchases that get bonus points. I thought this was a great beginner card, but I don’t use it much now. I like the benefits my other cards have now. If you don’t have a credit card, this one isn’t too difficult to get approved for and is great for beginners!
Wells Fargo Autograph Visa
The second card I got was through my bank, the Wells Fargo Autograph Visa Card. I got this card my senior year of college before going on a trip abroad. I wanted a card that had no international fees, so this felt like a must get. It gets 3x points on all things travel, at restaurants, and at gas stations. This was my go to card for a while! I don’t use it too often now, but I always carry it with me.
Chase Sapphire Preferred
The most recent card I got the December after I graduated college was the Chase Sapphire Preferred. I was living abroad at this time and found the introduction offer hard to pass up! At the time, the deal was 60,000 points after spending a certain amount. Maybe it was $4000? I was already spending so much money on traveling, I thought, why not get some points out of it. I transferred those points into money to pay off what I spent in an entire month! During my time abroad I did a TON of solo traveling, which made my first year post graduation super exciting. If you are interested in solo travel to spice things up, or on how to move abroad, click on the links to read more.
This card has similar rewards to the Autograph card, but a way stronger points system. I haven’t used the Chase Travel portal yet, but am saving up points to book a trip with. The Sapphire Preferred is seen as the best beginner travel card, and it is the card I use daily. It does have a $95 annual fee, but for me, all the benefits outweigh the cost.
Thoughts
I personally think credit cards are a great tool when used responsibly. It’s also fun with all the points you can save up and use on different things like free flights or hotels. As long as you can be smart with it, it is something that everyone should have! Besides, if you don’t, you’ll need your parents to co-sign on that new car or new apartment to be able to get it. Building your credit is an important part of being financially responsible and an adult.
Should You Live at Home?
I personally think most people should live at home for at least a year after graduating. Exceptions are if you are a nepo baby, if your parents pay for your degree or pay your rent, or if that’s just genuinely not an option for you. To set yourself up for financial success, it’s incredibly helpful to not have to pay rent immediately and put that money elsewhere. Unfortunately, there are so many things you can do with your money besides spending it. One of the saddest post grad money tips is that you can either choose to ball big now, or ball EVEN bigger later.
Where Should My Paycheck Money Go?
1- Student Loans
If you have student loans, these are the first things you should start paying, or at least planning for. As I am writing this, student loans are still frozen. I’ve created a plan to pay off all of my student loans in a year, which physically hurts me to do, to watch all that money leave.
Creating a plan is essential, and one of the best post grad money tips. If you just ignore them, you will be caught unprepared when they are unfrozen. Look at the plan options on the FAFSA website or with your loan provider.
SAVE Plan
You start paying your loans back six months after college graduation, unless you start another degree. I personally joined the SAVE plan. Since I made less than 30k, I wasn’t required to pay anything. That is a great option to join if there are a lot of things up in the air for you. Currently, the government is deciding if that plan should be continued, so now all my loans are sitting in forbearance.
If you get a full time job right after graduating, you should put money aside for when the payments start! Remember, paying more than the principal, even just a little, will help you pay off your loans faster. Make sure the extra payment is going towards the principal, not the interest that’s accruing (though you have to pay that too). If you have questions about this, you can literally call your loan provider and tell them specifically that the extra money is going towards the principal. That way it will definitely go where it’s supposed to go.
Loan Forgiveness
If you’re planning to work for a non profit or the government, you should look at Public Service Loan Forgiveness. After working for the government or a non-profit for 10 years (and paying your monthly payments on time), they forgive all of your student loans! If this is something that might work for you, definitely pick the lowest amount payment plan!
Take some time to decide how you will pay off your student loans, if you need to! Will you join a plan and pay a little extra when you can? Potentially, will they get forgiven? Will you grind to get rid of them like me? Make a plan so you can have some peace of mind, and know where part of your paycheck should go.
Other Essential Savings
2- Emergency Fund
If you plan on living at home for the foreseeable future, this might not be as pressing to start, but it is extremely important to have. An emergency fund is a savings account that has 3 to 5 months of living expenses. That way, if something comes up where you lose your job or an emergency happens, you have money buffered into use. If a big problem arises, it won’t ruin your finances! It’s best to have your emergency fund in a HYSA.
Open a HYSA
A HYSA is a high yield savings account, an account that earns interest (free money) over time as it grows. This growth is completely insured and safe, not like investing where you can lose money. I have a HYSA with Discover and it’s the only savings account that I use! Two other popular HYSA are with Ally Bank and Marcus by Goldman Sachs.
Both Marcus and Discover have a 4.10% interest rate! This is the highest interest rate on the market right now that I’ve seen. The only “downside” is that you can only transfer money out of the account 6 times a month. For me, I don’t touch the money in this savings account often, so it isn’t a problem for me, but something to know. I mean, you can’t beat earning money every month without having to do anything for it! This is one of the top post grad money tips I can give. I highly encourage you to open one!
3- Saving Retirement
One of the best ways you can set yourself up for future success is to start saving for retirement as soon as possible. While it sounds way too soon, the best day to start investing was yesterday as they say! You can open a retirement account either by yourself or through your job. You can open an IRA account on your own through a brokerage website like Vanguard, Fidelity, or Charles Schwab.
There are two types of IRA, the basic IRA and a Roth IRA. The difference is when the money is taxed. In a traditional IRA, the money is taxed when you take it out. With a Roth IRA, you put money that’s been already taxed into the account, and you can take it out tax free.
Why you should probably go Roth
If you are younger, you should pick a Roth IRA. This gives you an advantage, since you are paying taxes on it now while you’re in a lower tax bracket, instead of the higher taxes you would pay later in life when you’re making more money in a higher bracket. In any IRA account you can add up to $7000 a year; $8000 if you are over 50. That equates to adding about $583 each month in. Remember, you have to invest the money for it to grow! Most people invest in the S&p 500, which historically has grown about 10% every year for the past 100 years! People normally are a bit more cautious and estimate about 7% when doing the calculations for how much they’ll have by retirement. You can use this website to do your own calculations.
If you choose to save for retirement through your company, you can choose a traditional 401k or a Roth 401k (same differentiations). The yearly limit is significantly higher at $23,000, but you can only open a 401k with your company, not on your own unless you have your own business. Especially if your company will match what you add, normally to about 3-6%, that’s free money!
While all these big numbers might seem daunting, know that adding ANY money will help you in the long run.
Saving to move out (if applicable)
If you plan on living at home, while you aren’t paying rent, start saving up for when you do. Moving out is always way more expensive than anticipated. Start buying small things, like dishes, utensils, towels, etc, that you’ll need ahead of time, maybe when they are on sale! Set a goal for yourself that aligns with your timeline and is feasible. Look at what you’ll need to have to get approved for an apartment. Do you need a certain credit score? Do you need to have three months rent in the bank account, or more? See what the requirements are in your area or where you want to move to, then plan accordingly.
Other Savings Ideas
Travel Fund
As I mentioned earlier, I am an avid traveler. I have goal places to travel throughout my 20s, but want to do so in a financially responsible way. Every paycheck, I have a certain amount that I save that goes directly into a pot to fund my future travels. In 2025, I hope to go to Mexico and also Peru, fingers crossed. If you are also looking to travel more, this can be something you put money aside for as well.
A Fund of Your Choice
If there is something you’re super passionate about and want to get in a responsible way, create your own savings fund for it. I’ve gotten really into photography this past year, so over the summer I created a few month-long savings fund to save up for the camera I wanted (a Fujifilm XT30 -II if you were curious). Sometimes it’s a bit difficult seeing people online doing insanely expensive hauls all the time and not having the impulse to just buy what you want. For me, I like to wait a few weeks before I buy something to make sure that I truly like it. I hate feeling buyers remorse or like I wasted my money. For you, figure out a plan of how to balance all of the savings versus the spending.
Conclusion
We’ve gone through credit cards, loans, investing, retirement, and all types of savings very briefly here. These have been my top post grad money tips, but of course, I am not an expert. Do a ton of research on whatever you decide to implement into your life. And of course, don’t try to implement too many things at once. Keep educating yourself and make choices that will improve your life now, and in the future. Post grad life can be hard, but it doesn’t have to be! This blog has tons of posts related to life after college. Check out this post for how to make post grad life suck less, and this one for how to master doing things alone.
Good for you for taking the time to learn something that will improve your life! Best of luck!
