Important Advice for New Graduates

When you graduate college, you'll be responsible for your personal finances, many of which are new responsibilities that you may haven't thought about before. There are many important things you should think about now that you're on your own.

1. Start Saving & Investing. Start saving money as soon as you start receiving a regular paycheck. One way to do this is to 'pay yourself first' by having a small portion of your paycheck automatically transferred into a savings account each pay period. That way, you can build an emergency fund, which is crucial to have to prepare for unexpected events such as car repair, medical bills or job loss. Experts recommend having 6-9 months of living expenses in your emergency fund. Or, start saving for retirement early by investing* where you can, either in your employer’s 401(k), an IRA, a Roth IRA or a certificate. If you start in your 20s, the money you invest will have lots of time to grow. Learn more about 401(k)s »
2. Establish Positive Credit. Your personal credit report and score may be the most important components of your financial profile. Credit reports mainly track your payments on credit cards and loans, but if you fail to pay some other type of obligation (like monthly bills) and it goes into collections, it can wind up on your credit report as negative information. Establish positive credit by paying all your bills on time and getting credit and using it responsibly. Potential employers, landlords, insurers and lenders may look at your credit report before they decide whether to do business with you. In addition, a good credit report can save you money because it will qualify you for better rates on credit cards, loans and insurance. Remember, you can monitor your credit score in Web Branch by using My Credit Score. Learn more about credit history and scores »
3. Develop a Spending Plan & Track Your Expenses. Creating a budget and sticking to it will be very beneficial for your financial success. It's all about being aware of how much you are spending and where you’re spending it, and making sure your expenses don’t exceed your income. Simply list your monthly income after taxes and subtract your monthly expenses. Be sure to account for annual or bi-annual expenses like auto insurance payments. If you find your expenses exceed your income, you are at risk for going into debt, and you'll need to make cuts. Track your expenses by using Money Management Tools in Web Branch, and you can see where you spend your money.
4. Pay Back Student Loans. When you create your budget, be sure to include any student loan debt you may have. If you do have student loans to repay, you will more than likely have a 6 month grace period from the time of graduation to start the repayment process. With a difficult job market it can take some time to find suitable work so that you can begin making those payments, but don’t fret. There are programs in place that can help minimize the burden of repaying student loans if you’re out of work. Also, if you have a Private Student Loan with us, take advantage of the automatic bill payment option we offer to save 0.25%¹ on your interest rate.
5. Take Over Your Taxes.² When you graduate from college, you will no longer be able to be claimed as a dependent by your parents on their state and federal taxes. You will be responsible for preparing and filing your taxes as an individual. You can prepare your own taxes by hand, by using a computer program, or if they’re more complicated, you can take them to a tax preparer for a fee. Ask your employer, parent or another person you trust who has experience filing taxes to learn more as soon as you can. Find out what documents to keep and be aware of the tax filing deadline.
6. Protect Yourself from Identity Theft. Your Social Security number, your account numbers, credit card numbers and your passwords are all valuable commodities to thieves. Scammers have devised many techniques meant to trick you into sharing this sensitive information. Keep your guard up, and never click on an emailed link. In addition, remember to always be suspicious of any email that you receive that asks you to wire money, even if the message appears to come from a friend. Also, UW Credit Union would never contact you with an unsolicited phone call, email or text message that requests you to "confirm" or "update" your password, PIN or account information. Report any unusual transactions or activity to us immediately. Contact UW Credit Union »
7. Insure Yourself. Make sure that you have proper insurance coverage. This includes auto, health and renters insurance. Insurance can be expensive, but not having insurance at all when you have an accident or end up needing expensive treatment can cost thousands. Keep in mind that because of the recent health care legislation, if you’re under age 26, you are able to stay on your parent’s insurance. Learn more about renters insurance »

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¹ To be eligible for the interest rate reduction for automatic payments, you must be signed up for automatic payments through Great Lakes Educational Loan Services. If at any time automatic payments are stopped or the loan is not in repayment status, the rate discount will not be applied. UW Credit Union reserves the right to modify or discontinue benefits at its discretion and without notice.

² The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor.