Best Financial Tips for New Graduates

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When I was a college senior, I was anxious about graduation for almost the entire year. I couldn’t help but worry that I might not be able to find a job that I liked or one that would pay enough to live on. I really didn’t know how much it cost to live in the…

When I was a college senior, I was anxious about graduation for almost the entire year. I couldn’t help but worry that I might not be able to find a job that I liked or one that would pay enough to live on. I really didn’t know how much it cost to live in the “real world” outside the gates of our stunning campus at The University of the South in Sewanee, Tennessee. But I knew I was accustomed to a lifestyle that I probably wouldn’t be able to afford on my own, at least for a little while.

When I think back about how I handled money after graduation and before getting married, I made some mistakes that would have been easy to avoid. They weren’t earth-shattering screw-ups that scarred my finances for life—but I could have gotten a faster head start if I’d been wise enough to side-step them. I simply didn’t know what I didn’t know. In other words, I lacked financial literacy.

Best financial tips for new graduatesManaging your own income and expenses for the first time is a huge transition that typically involves lots of trial and error for most people. If I could get five financial do-overs for my post-graduate money management, here’s what I’d go back in time to change:

Financial Do-Over #1: Participate in a Workplace Retirement Plan Sooner

I always took advantage of workplace insurance benefits, but I procrastinated participating in my employer’s 401(k) retirement plan. I give partial blame to the companies that I worked for back then, because they did a poor job of explaining the program. I never knew that the employer contributed matching funds, that I could increase or decrease my contributions during certain times of the year, or that I could take every penny of my contributions with me when I left the job.

Not fully understanding what a 401(k) was made me default to no participation for several years. Now, many companies have plans with automatic enrollment where they deduct a 3% contribution from your pay as soon as you’re eligible to participate, unless you specifically opt out of the plan. As much as I wish there was no need to “dumb down” investing for retirement, having automatic enrollment would have encouraged me to start saving a little earlier, before I fully appreciated all the benefits that come with a retirement plan at work.

Financial Do-Over #2: Share Living Expenses Longer

After I graduated, I lived with several college buddies in Atlanta, Georgia. We rented houses that were really affordable when split three ways. However, I got the itch to live by myself after the second year. I wanted a small, quiet apartment that I could call my own. I found a great place that was a stretch for my budget, but I decided to go for it anyway. Once the utility bills started rolling in, I found myself putting more expenses like dining out and work clothes on my credit card because I didn’t have the cash to pay for them. If I had stuck it out and shared expenses with roomies a little longer, I probably wouldn’t have racked up as much credit card debt.

If living at home is an option for you, that can be a great way to save a ton of money. I don’t recommend overstaying your welcome, but even living at home for a year after graduation while you’re working can be the key to amassing money for a car, a house down payment, retirement, or building up an emergency fund.

Financial Do-Over #3:  Save for the Unexpected

Speaking of emergency funds, I had never even heard the term “emergency fund” when I was a recent graduate. An emergency fund is a financial safety net or cushion that keeps you protected and stress-free when you need money to pay for something unexpected like a huge car repair bill or getting downsized at work.

We know that the “real world” throws lots of curve balls, so it’s wise to expect the unexpected by accumulating an emergency fund in an FDIC-insured saving or money market account. Yes, it’s true that you can fall back on a credit card in a dire emergency—but if you can’t pay it off, your emergency grows even more expensive as interest charges continue to pile on every month.

Financial Do-Over #4: Understand Student Loans

I was very fortunate that my parents paid for my undergraduate tuition, but I did take out a small student loan for my MBA at the University of Florida. I could have paid cash for the tuition, but I decided instead to get a low-interest loan so I could keep control of my cash during those graduate school years. I paid off the loan right after school, but I really didn’t understand all the available options for paying student loans.

Be aware that student loans may have a variety of features and repayment options. It’s a great idea to review your loan terms or speak with your loan provider so you know exactly when you need to begin making payments, how much interest you will pay, your student loan interest rates, if there are any student loan consolidation options available to you, and what recourse there may be if you are unable to meet your student loan obligations.

Financial Do-Over #5: Learn More About Money

I didn’t take a deep interest in personal finance until graduate school. If I had read a book like the one I published this year, Money Girl’s Smart Moves to Grow Rich, I would have had a great time learning everything I needed to know about managing money and growing wealth. Okay, maybe I’m a little biased. But even if you don’t read my book, there are many excellent books, magazines, or free blogs and podcasts that can take your current knowledge about personal finances to the next level.

If you’re not a graduate but you know one who could benefit from the information I’ve shared with you, consider forwarding this article to him or her. These financial tips might change their entire financial future and be the best graduation present they ever receive!

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About Laura Adams

Laura Adams is the author of the award-winning book, Money Girl's Smart Moves to Grow Rich. Her weekly Money Girl podcast has been downloaded over 10 million times. Subscribe to the show for free on iTunes and get her updates at, and Twitter.

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  1. Ravi Gupta says


    Great article! I’m currently living at home and this has allowed me to save plenty of money. I’ll also be looking for a job as this is my senior year. I’m hoping that I will be able to save enough to pay for a masters and if not I’ll be asking some family members if I could possibly borrow to avoid having to pay interest. I think the best tip of all is being able to live way below your means as a way to build your emergency fund and then make additional payments on any loans that you may have.

    -Ravi Gupta

  2. Pat S. says

    Tip #1 should be: STAY OUT OF DEBT! If you have student loans, strive to make them the only debt you ever have again. Otherwise, you will find yourself digging out of debt for many years to come, when you could be saving as much money as possible, and letting compounding returns build your net worth over the many working years ahead of you.

  3. Daddy Paul says

    I like the idea of staying out of debt. I wrote a piece “What every High School student should know about investing” a few years ago. Too bad they don’t hand it out with every diploma.

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