College graduation is quickly approaching.  You will walk across the stage, receive your hard-earned diploma and land your first job. Congratulations! You did it!  But before you make any major financial decisions, take some time to make a financial plan, including a budget. Be prepared to tell your money what it is going to do for you instead of the other way around.

Student loans

If you are like most college students, part of your education was financed by federal student loans. Take advantage of your six month grace period to save for your first payment, so you are at least one month ahead. Besides incurring a late fee if it is not paid on time, student loans are reported to credit agencies for better or worse, so make those payments on time.

Speaking of on-time payments, setting up auto bill pay can be the difference between hundreds of dollars in unnecessary late fees and a budget surplus. We are all human, and in this time of busyness, having bills be deducted automatically gives one less thing to worry about. Of course, make sure the dates of the auto-withdrawals coincide with your pay dates!

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Smartphones make tracking purchases easier than ever. To see where your money is really going, download an app of your choice and learn about your spending habits, then make some choices. Do you really need that $4 coffee or can you make it at home? How much money are you spending, a little at a time, on items you may be able to live happily without?

A basic budgeting principle is to simply spend less than you make, and that is good advice, but even if you can technically afford certain items, sometimes that money can be put to better use. A good example is a new car. Many times the excitement of a new job translates into the desire for a new car, and while transportation is a necessity for many, cars are “depreciating assets” which means, unlike most homes, which increase in value over time, the value of a car reduces each year. Instead of financing a $25,000 car, think about buying a reliable used car for less than half of that and use the extra for other, more important financial goals.


Tomorrow is unknown, and life happens, therefore having emergency savings could be the single most stress-reducing financial decision you could make while you are enjoying financial peace. A general rule is to save at least what it costs to live per month; ideally, a 3-6 month savings is even better, but start somewhere. Make saving part of your budget, like a regular bill. If you learn to live without it, you won’t even miss it and you will be so glad it’s there when you need it. And you WILL need it.

The future

This may seem counterintuitive, but having a credit card is an important way to build your credit score. Because credit cards generally have higher interest rates, paying it off each month is crucial. All major credit cards are reported to the 3 major credit bureaus, and having on-time payments can boost your score immensely.

There will come a day when you want to buy a house, or you need to purchase appliances on credit – the better your credit score is, the lower your interest rate, therefore your overall purchase price will be. Be mindful of your credit score, of where you spend your money and of how much money you need to live in the present and prepare for the future. Then make your money work for you. It’s way more fun that way.