No matter what degree you graduate with, chances are good that your college professors did not teach you how to manage your personal finances wisely. This causes many new college graduates to rack up credit card debt, take on loans they can’t afford or blow their first precious paychecks on luxury spending. Get ready to go back to class because MBT Bank has some lessons in financial planning post-graduation.
Protect your credit score – Bad credit can make it difficult to get hired, be approved for a lease and take out loans. One key way to protect your credit score is to pay bills on time. Set up automatic payments for regular expenses to avoid missing a single payment.
Create a budget –Just because your new job has boosted your income does not mean that you should start upgrading your lifestyle. The easiest way to keep your economical mindset is to keep living like a student. Make a list of everything that you are spending money on. If there is nothing left to put into retirement or emergency savings at the end of the month, cut some expenses.
Start saving – None of us know what is going to happen tomorrow, let alone a few years from now. There are many financial crises that could come up, so start building up an emergency fund that covers three to six months of living expenses. Think about putting your graduation cash gifts towards starting your emergency fund!
Manage debt – A good rule of thumb is to pay off the highest-rate debt first. Credit cards typically carry a higher interest rate than student loans. If you have a hard time paying off your credit card bill, it may be time to evaluate spending habits and whether or not you are living within your means. Consider using an income-based repayment system, which ties monthly payments to income rather than the total debt. You may also want to think about consolidating your student loan debt. This can help lower the monthly payment and make it easier to manage.
If you just graduated from college or started a new career, congratulations! MBT Bank wants to help set you on the road to financial peace. If you need help setting up a savings account, Online Banking or anything other financial tools, stop by one of our locations!