This month, as college seniors are graduating and stepping out into the real world, some of their most important life lessons are still to be learned – mostly about how to handle their finances. This article from U.S. News offers six crucial tips for college graduates on how to provide themselves with a more solid financial future.
One of the most important things to do is to start building your credit now. Many credit scoring models factor in your age of accounts, so it’s beneficial to start using credit as soon as you can. Luckily, building your credit can be easy if you learn what factors affect your score and develop good habits such as paying your bills on time, not using all the credit you’re granted and spacing out applications for more credit.
Don’t be afraid or ashamed of debt – student loans can actually help build your credit history as long as you handle them responsibly. The key is to know your options and make a plan for attacking your loans.
If you have credit card debt, it may be prudent to make minimum payments on your other loans while putting more money toward paying off your cards, as they probably have higher interest rates. This could save you money and shorten the amount of time it will take to pay off your debt.
And the learning shouldn’t stop when you leave school – especially when it comes to topics that could impact your financial life. If you don’t know what a 401(k), credit report or W-4 is, now’s the time to start learning. Don’t wait until these terms apply to you. Instead, proactively read up on how you can improve and grow your money.
