Tips for new grads to get on the road to financial feedom

New grads may be entering the working world with a diploma, but they still need to continue their education when it comes to managing their finances. As they receive their first paychecks – and first big bills – they will find following these dos and don’ts helpful in establishing their financial freedom.


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  • set goals
  • use the goals to budget
  • include savings
  • re-consider the way you think about “retirement savings”
  • learn to live beneath your means

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  • live with credit card debt
  • be late
  • think you’re covered
  • neglect your permanent record
  • get complacent

[publishpress_authors_data]'s recommendation to ExpertBeacon readers: Do

Do set goals

It’s hard to decide where to go if you don’t have a plan. With finances, it’s hard to spend and save smartly if you don’t have goals. Maybe it’s taking a dream vacation, buying a new outfit or having time to train for a triathlon. Write down the goals, knowing that you’ll continue to modify them – sometimes weekly, sometimes monthly, sometimes annually. Keeping them front of mind will help guide finances in that first year, and throughout life.

Do use the goals to budget

“Budgeting” is not a popular word, and scares many 20-somethings. Yet it’s really just an accounting of income and expenses, and a plan on how to use the two. Create the budget around the goals you set. Make it simple so you use it regularly. Use budgeting and finance software (often free online), a spreadsheet or pencil and paper.

Do include savings

In the budget, make sure to include a category for savings. Aim for 10 percent of every paycheck – more if possible, less if necessary. Stick to a percent that works for you. This applies for everyone, even those not receiving a “regular” paycheck (self-employed, freelance, part-time and commission-based employees).

Do re-consider the way you think about “retirement savings”

“Saving for retirement” may not resonate with new grads. But “freedom to do whatever you want” does. Those new to the workforce can much more readily understand the idea of saving when the ultimate goal is the option to work, not work, do what they want – at whatever age.

Do learn to live beneath your means

A priority rule is to never spend beyond what you can afford; that’s living within your means. Go one step further to start assuring your financial freedom. Prioritize needs over wants, and live beneath your means so you have ample room for savings. You’ll have a happier, less stressful life.

[publishpress_authors_data]'s professional advice to ExpertBeacon readers: Don't

Do not live with credit card debt

If starting out with any credit card debt, make paying it down the No. 1 priority (after paying student loan debt payments). Few investments can top the rate of return. Paying off credit card debt at typical interest rates effectively makes an investment that returns 15-20 percent per year.

Do not be late

Pay every bill in full and on time. Many people spend more money paying interest (and late fees) than on many other expenses. You’ll build your credit profile and up your credit score at the same time.

Do not think you’re covered

Along with savings for your big goals, save for the unexpected. Even if you are able to save only $25, $50 or $100 per month, you will have at least a few hundred dollars in emergency savings within a year. That could be enough to cover new eyeglasses or a car repair. Gradually build up the emergency fund over time to cover six-nine months of living expenses.

Do not neglect your permanent record

Remember the threat of something ending up on your “permanent record”? Once an adult and in the working world, there really is such a thing: your credit reports. A good credit score affects an individual’s ability to borrow money and the interest rate he or she pays. Credit scores also can affect the ability to rent an apartment, lease a car or even get a job. Everyone can access credit reports once each year for free at Find out where you are starting from, correct any inaccuracies on the reports, and get to work on building that credit profile.

Do not get complacen

First jobs often bring in less than hoped-for income. If it is absolutely impossible to save from current income, financial hardship may not be far away. If you need to, find ways to generate additional income, through working to obtain a raise at a current job, seeking a better-paid position or adding a temporary side job.


Living within one’s means is the best way to avoid going into debt and build savings. Start with, and keep that standard. Set your goals and pay attention to your budget, and you’ll be well on the road to financial freedom.

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