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Smart Financial Moves for New Graduates

As you approach college graduation and the onset of adult financial responsibilities, consider these seven smart money moves to set yourself up for success. Preparing financially before you graduate can be one of the best decisions you make.

1. Gather Your Documents

Before stepping into the world on your own, ensure you have all necessary paperwork from your parents. This includes your birth certificate, Social Security card, insurance cards (car, health, dental), vaccination records, and high school diploma. These documents will be essential for various financial situations, such as applying for apartments, credit cards, or filling out a W-4 at your new job.

2. Understand Your Student Loan Repayment Details

If you have student loans, it’s crucial to understand your repayment terms, payment due dates, and when your grace period ends. Having a repayment plan in place can boost your confidence. Consider repaying any accrued interest on unsubsidized loans before the grace period ends to avoid increasing your loan amount and payments.

3. Begin Building Credit

Building credit involves adding tradelines, such as loans, credit cards, or utility payments, to your credit report. If you have a student loan, you’ve already started building credit. Adding a credit card can further expand your credit mix and offer perks. A healthy credit history can help you achieve financial goals like qualifying for an apartment, securing certain jobs, or buying a car or home.

4. Begin Applying for Jobs

Depending on your financial situation, you may need to start applying for jobs several months before graduation. This can help you secure a position and have income soon after graduation. Utilize on-campus resources like the career center to perfect your resume. Be prepared for a job hunt that may take some time, and ensure you have enough savings to bridge the gap between graduation and employment.

5. Find an Affordable Place to Live

Finding an affordable place to live right out of college may mean living with roommates or family. Rent can take up a significant portion of your income, especially when starting out. Experts recommend that housing costs should not exceed 30% of your monthly paycheck. Living with friends or family can help you save money while you get on your feet.

6. Start Saving

If possible, start saving money before college graduation. An emergency fund is essential for financial independence. Aim for an initial goal, such as $1,000, and then save enough to cover three to six months of post-grad expenses. This includes living expenses, cellphone bills, groceries, and minimum debt payments. Having emergency savings can help you avoid debt when unexpected expenses arise. Consider opening a high-yield savings account or Roth IRA for better returns on your savings.

7. Protect Your Identity and Digital Financial Health

As you open more official accounts like bank accounts and utilities, take steps to protect your identity. Use different passwords across accounts and avoid staying logged in to financial accounts on apps. Be cautious when responding to ads for apartments and never pay upfront for a place you haven’t seen. Developing an awareness of fraud and scammers is crucial as you navigate financial matters as an adult.

For many young adults, college graduation marks a significant financial turning point. Being prepared and having an action plan can help you achieve long-term goals like traveling or owning a home. In the short term, focus on creating a healthy financial foundation, which can pay off in the future.

For any mortgage-related needs, call O1ne Mortgage at 213-732-3074. We’re here to help you navigate your financial journey with confidence.

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