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Money tips for new graduates

9 Money Tips New Graduates Should Know

Congratulations, new graduate!

Becoming a working adult after college and receiving that first post-college paycheck is exciting, almost as exciting as obtaining the degree or diploma itself. However, it can also be somewhat terrifying, especially if you’re financially supporting yourself for the first time.

“As you embark on your professional journey, it’s crucial to establish a strong financial foundation. Managing your money wisely from the start can set you up for long-term financial success,” says Rafe Klein, Senior Vice President of Investments at David Lerner Associates, Inc.

This article will explore 9 essential money tips that every new graduate should know.

1. Don’t Get Used to The Grace Period for Your Loans

Many 2023 college graduates will have some student loans to pay off. The average student loan debt for the Class of 2022 was $37,338.

Developing a plan to pay off your student debt is your first big financial decision.

While the grace period after graduation offers temporary relief from loan payments, it’s important not to become complacent. Use this time to understand your loan terms, interest rates, and repayment options. Before the grace period ends, update your information with your student loan servicer because it’s crucial that they have up-to-date information such as your address.

If you’re in a position to do so, consider making voluntary payments during the grace period to reduce your principal and minimize interest accrual.

2. If You Have to Borrow, Don’t Just Focus on The Monthly Loan Payment

When borrowing money, whether for a car, home, or post-graduate education, it’s tempting to focus solely on the monthly payment.

However, consider the overall cost of borrowing, including interest rates, fees, and repayment terms. A lower monthly payment may result in higher long-term costs.

Strive for a balance between affordability and minimizing debt.

3. Become Financially Literate

Financial literacy is a key skill that empowers you to make informed decisions about your money.

Take the time to educate yourself on personal finance topics such as budgeting, investing, credit scores, and managing debt. Resources like books, online courses, and personal finance blogs can provide valuable insights. Read, learn, and think ahead.

4. Make Budgeting Your Friend

Creating a budget is a vital step toward achieving financial stability. It helps you figure out what you can afford and when.

Instead of following the latest budgeting trend on social media, sit down with a pen and notebook. Write down your income sources, expenses, and savings goals.

Pinpoint areas where you can cut back on unnecessary expenses and prioritize your financial objectives. After accounting for basic expenses like rent, food, and car payments, you can then see what nonessentials also fit within your budget.

A well-planned budget will help you live within your means and build a strong financial foundation.

5. Be Careful Not to Fall into a Debt Trap

Be cautious when it comes to accumulating high-interest debt, such as credit card debt.

Develop responsible credit habits by keeping your credit utilization low, paying your monthly bills in full and on time, and using credit cards wisely.

If you find yourself struggling with debt, it’s important to seek professional advice to explore repayment options and develop a debt management plan.

6. Get Insured

It may be tempting to save a couple bucks each month by skipping coverage, especially when you’re young, healthy, and financially stretched.

However, it is key to protect yourself and your assets. Consider acquiring essential insurance coverage, such as health insurance, renter’s or homeowner’s insurance, and auto insurance.

Additionally, evaluate the benefits of life insurance and disability insurance based on your specific circumstances.

7. Don’t Count on Money You Don’t Have Yet

As you start your career, it’s natural to aspire for salary increases and promotions.

While it’s possible that you may see an increase in income in the future, it’s essential not to rely on that anticipated money to support your current lifestyle.

Maintain a realistic financial outlook, live within your means, and focus on building a strong financial foundation based on your current income and savings habits.

8. Start Saving for Retirement Now

Retirement may seem far away, but it’s never too early to begin saving.

Starting at age 22 instead of 32 can make a significant difference. For example, if you invest $5,000 into a retirement account annually starting at the age of 22, by the time you reach retirement age (67), you’ll have nearly twice the amount of money saved compared to someone who starts investing at 32.

Take advantage of retirement accounts offered by your employer, such as a 401(k) or a similar retirement plan.

Consider contributing enough to meet any employer matching contributions to maximize your savings. “By not taking advantage of it, you’re basically leaving free money on the table,” advises Rafe.

The power of compound interest and long-term investments can have a significant impact on your retirement nest egg.

9. Seek Out Sound Financial Advice

Navigating the world of personal finance can be complex.

It’s important to be careful about the advice you follow, as most of the personal finance advice on social media is false.

Instead, consider seeking guidance from a qualified financial advisor who can help you create a tailored financial plan, address your specific goals, and provide valuable insights on investment strategies, tax planning, and more.


As a new graduate, embracing these money tips will lay the foundation for a secure financial future. Remember, it’s not just about earning money; it’s about making informed decisions, setting financial goals, and developing healthy financial habits.

By implementing these tips early on, you can start working toward the milestones you want to accomplish later in life, whatever they may be.

Best of luck on your financial journey!

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

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