College graduation is a time for celebrating accomplishments and looking forward to the future. After years of pulling all-nighters in the library, cramming for final exams and searching for careers, the culmination has finally arrived.
But as a recent college grad, I know the class of 2022 might have some anxieties about entering the “real world.” Unless your student majored in finance, they probably have questions about how to best manage their money in the next phase of life.
I’ve pulled together some information and resources that helped me transition from student life to the workforce. Take a read before your loved one crosses the stage, or pass it on to a grad you know.
Fact: Maintaining a good credit score is one of the best ways to set up for financial success. Many young people know this but aren’t quite sure where to start.
The good news: Some graduates might be renting their own place, buying a car or getting a credit card for the first time. These are all great ways to boost creditworthiness as long as they pay their bills consistently and on time. My tip? Set up auto pay and never miss a payment.
Resources: Read our Top Credit Questions Answered article for quick hits on the credit basics. For more information on how credit scores are calculated and tips for improving your score, visit this KEYS Online Credit Scores and Reports Module.
Learn how taxes work.
Fact:For many, a postgrad job means filing taxes independently and maybe for the first time.
The good news:Filing taxes for the first time might be easier than you think. I found that staying organized and gathering documents ahead of time makes the process a lot less overwhelming.
Pro tip for grads:Keep a digital or physical folder of all important financial paperwork throughout the year, including proof of income (such as your W-2), charitable donations and student loan interest paid. That way, when it’s time to file, you aren’t digging through stacks of paper or frantically searching your emails.
Some more good news:There are ways to file online for free or at very little cost. Just know you may need to consult a tax professional about which forms are required, based on your financial situation. Resources:For an overview of tax basics, explore this interactive KEYS Online Taxes: The Basic Module.
Save for the future.
Fact:Saving money is one of the most important habits for young adults to develop. But if they’ve never saved before or don’t have any particular financial goals in mind, putting money aside might be overwhelming.
The good news:Saving is kind of like working out; you don’t have to be an expert, you just need to get started. Our KEYS Online Savings Accounts Module recommends stashing 20% of each paycheck, but any amount of saving is a step in the right direction. Even starting with $10 per week can help you save more than $500 a year.
The money saved can go toward short-term goals (hello, weekend trip to Vegas!) or long-term ones like buying a house. As saving becomes more of a habit, consider increasing the amount you set aside or start an emergency fund.
Resources:This five-minute KEYS Online Healthy Financial Habits Module breaks down the fundamentals of savings and money management. It’s a great starter course for getting your finances on the right track.
Faith Bonds loves a good intersection — whether it pops up on the road or in her storytelling. Discovering new paths motivates her to share unique perspectives and dive deeper into topics she's passionate about like budgeting basics and the French language. When she’s not carving out catchy headlines, you can find her etching the ice with her figure skating blades.