2min
May 9, 2024
As the school semester comes to an end here in Boulder and our CU interns start their summer journeys at Savvly, we're focusing on how recent graduates can navigate the transition from campus to career with smart financial moves.
Graduating college is an exciting time — and arguably the most important time to build a strong financial foundation. In this blog, we’ll explore practical strategies for mastering your finances and setting yourself up for success post-graduation.
Build a savings plan
Building a savings plan can help keep your aspirations in line with your financial capabilities. You can do this by tracking your spending habits along with your monthly income to create a budget. The 50/30/20 rule is a good way to start budgeting: 50% of income goes to essentials (rent, groceries, utilities), 30% for discretionary spending (dining out, entertainment), and 20% for savings and debt repayment.
Pay off high-interest debt first
It's important to know how much you owe, what sort of student loan you have (federal vs. private), and what repayment options you have. With this information in hand, prioritize paying off high-interest debt first. This approach can help you minimize the amount you pay in the long run, reducing your financial burden over time.
If you are struggling with loan repayments, reach out to your loan servicer as they can provide guidance on alternative repayment strategies, such as revised repayment plans, deferment, or forbearance, which may temporarily relieve your financial stress. Taking proactive steps will help you regain control and work toward financial stability.
Know your worth
Finding a high-paying job that aligns with both your career vision and financial needs can be challenging. When looking for jobs or before accepting a job offer, make sure to look at average salaries for the position you are applying for. Determine your minimum salary requirements based on your living expenses and financial goals.
Understanding your financial needs will help you identify acceptable offers. In some cases, starting with a lower-paying opportunity to build your career could be more beneficial in the long run than holding out for a higher-paying role right away.
Also, make sure to check the benefits such as health insurance, paid time off, and retirement saving plans. Consider negotiating with your employer if you feel that you are being underpaid. Negotiating can be nerve-wracking, but practice helps build confidence. Plan your approach, anticipate questions or counteroffers, and be ready to explain why you deserve the requested compensation.
Build up a strong credit score
A strong credit score has many benefits such as lower interest rates on loans, better rental options, access to premium credit cards, and potentially better job prospects. However, building a strong credit score does require consistent financial discipline and strategic use of credit. To build a strong credit score make sure you pay your bills on time, aim to keep your credit card utilization rate below 30%, and consider working with a credit counselor if you struggle to manage your credit.
Start thinking about retirement
Although retirement may seem a long way off, the earlier you start saving, the more you can benefit from compounding interest. Financial planners suggest putting even as little as 1% of your paycheck toward retirement savings. If your new employer offers a 401(k), definitely take advantage of it — especially if they include a matching contribution!
Additionally, consider the benefits of a Roth 401(k) option, which uses after-tax money. This can be especially advantageous early in your career when you're probably in a lower tax bracket compared to later years. With a Roth 401(k), you’re setting yourself up for tax-free withdrawals in retirement, allowing your investments to grow without the burden of future taxes on your gains.
At Savvly, we believe you shouldn’t have to worry about having enough money when it comes time to retire. That’s why we created the first market-driven pension for retirement. It’s an innovative investment solution that leverages the long-term value of the S&P market and can provide you with payouts when it’s needed most.
