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Seven Smart Financial Moves for College Graduates

Graduating from college is an exciting milestone, but it also comes with new financial responsibilities. Setting yourself up for financial success before you walk across that stage may be one of the best choices you make. Here are seven smart money moves to help you get ahead of the game.

1. Gather Your Important Documents

As you prepare to launch into the world on your own, make sure you have all your necessary paperwork. This includes your birth certificate, Social Security card, insurance cards (car, health, and dental), vaccination records, and high school diploma. You’ll need these documents for various financial situations, such as applying for apartments, credit cards, or filling out a W-4 at your new job. Having them readily accessible can prevent delays in your plans.

2. Understand Your Student Loan Repayment Details

If you took out student loans, it’s crucial to understand your repayment terms, payment due dates, and minimum payment requirements. While most student loans offer a grace period, having a repayment plan in place can give you 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 is essential for achieving future financial goals. Credit reports are compiled by the three national credit reporting agencies: Experian, TransUnion, and Equifax. If you have a student loan, you’ve already started building credit. Adding a credit card can help expand your credit mix and take advantage of perks. A healthy credit history can assist in qualifying for an apartment, certain jobs, and future purchases like a car or home.

4. Start 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 as soon as possible after graduation. Utilize on-campus resources like the career center to polish your resume. The average job hunt can take over 20 weeks, so apply early or 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 often takes up a significant portion of your income, especially when you’re just starting out. Experts recommend that housing costs shouldn’t 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.

Get Your Degree in Personal Finance

College graduation is a turning point in your financial life. 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. This effort can pay dividends in your future.

At O1ne Mortgage, we understand the importance of financial stability and are here to help you achieve your goals. Whether you’re looking to buy your first home or need advice on managing your finances, our team is ready to assist you. Call us today at 213-732-3074 for any mortgage service needs. Let us help you build a secure financial future.

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