Financial planning for after graduation can be a bit hectic for the new alumni. Going from dorm rooms and dining halls to new apartments and grocery shopping can be a surprising change.
But with the proper planning and budgeting, realistic financial goals and financial responsibility can be easily reached for the recent grad. Here are ways to help your student plan for financial responsibility after graduating, and help set the path for positive financial habits.
If a student has taken out loans to help pay for college, then they will need to start making loan payments, generally six months after graduation. Sit with your student and look at over the federal or private loans' repayment plans. Student loans can be a financial hassle, but there are affordable options to help entry-level graduates. Choose a plan that is realistic and affordable, since the student can always change the plan later down the road.
If your student is constantly on their smart phone, then suggest they download the Mint application. This is a fantastic budgeting tool that can help a recent graduate be reminded of upcoming bills, as well as budget their living expenses. This tool can be easily accessed right on their mobile device with push notifications to let them know of upcoming bills and loan payments.
Have your student before and after graduation, check their credit score and be aware of what the number means. It is crucial that they frequently check their score since it has a tremendous impact on their financial future. A poor credit score will make it impossible for them to buy a house or take out a loan in the future. Checking their score frequently, also allows them to notice if there has been a mistake, or perhaps identity theft.
Saving & Checking Accounts
If your student is approaching graduation and does not have a saving or checking account, have them open up both accounts. Have them do their research to find banks that provide the greatest interest back. Have your student also consider online banking accounts since they generally provide better return interest rates and are more convenient.
Once graduating, graduates may want to purchase that new car or live in a pricey apartment with their friends. Post college is full of changes for a recent graduate, and through the excitement they may choose to live above their means. If a graduate ends up spending all their money on their rent or car payment, it becomes nearly impossible to save. Don't be too overbearing, but try to provide guidance with their lifestyle choices, and help bring them back to reality. They will thank you in the long run.