As May comes to a close, so do many college careers. This exciting time presents a new journey for graduates as they pursue their passions in the workforce. A toss of the tassel also signifies another new beginning — adulthood. After spending decades under the guidance of caretakers and professors, this is the first real step of independence for many students. Along with a new career (and a new paycheck), adulthood comes with a significant amount of responsibilities which can result in the neglect of proper credit health. That’s why I want to share some simple, go-to strategies that will empower credit success for young adults so they can effortlessly achieve their dreams.
Tip 1: Get a credit education
I know, I know. The last thing you want to think about after graduation is more studying. But understanding credit and how to play the credit game will pay off big time in the long run. If part of your plan includes buying a house, starting a family, or saving up for a large investment then you’ll want to listen up. Credit is the gateway to being considered and positively positioned for many of these milestones. You want to be clear on where your credit currently stands, how to increase your credit score, and more importantly how to maintain it. You can get a Free credit snapshot of your report https://myfreescorenow.com/en/creditsnapshot/user/register/11725?source=default
Tip 2: Make a payment plan.
As you take on more responsibilities, you’ll want to be sure you have a system in place to pay your bills. With most bills processing online, it’s much easier to schedule automatic payments to avoid missing a bill that could then negatively impact your credit. Take about an hour to thoroughly look over your current financial status and set up necessary accounts. What is your income? Which bills do you owe and when? What about your student loans, when do those repayments start? Checking in each month on your payment plan and making necessary updates will ensure financial success.
Tip 3: Let’s talk loans
First up: locate all your loans. Make sure lenders have your correct address and graduation date. Make note of when all repayments begin (visit the National Student Loan Data System to double-check that you know about all your student loans). Then make a plan to pay off your student loans as fast as you possibly can. Most students don’t realize how much loan debt they’ve actually accrued during their education, which can result in decades worth of debt. This can put a major hindrance on financial freedom. By living within your means and cutting out unnecessary expenses, you will quickly free up this payment and be able to delegate it elsewhere! There are numerous federal, state, and local loan forgiveness programs that can immensely contribute to this goal too. Check out this list of options to see if you’re eligible: https://studentloanhero.com/featured/the-complete-list-of-student-loan-forgiveness-programs/.
Tip 4: Create a budget
It’s tempting with your first taste of freedom and a crisp new paycheck (plus a shiny new credit card) to want to indulge in a shopping spree. Creating a budget will hold you accountable, develop healthy spending habits, and build good credit. While treating yourself occasionally is part of a balanced financial diet, binge shopping will do more harm than good. Set a reasonable budget that allows you to pay your bills on time, create a 3-6 month cushioned emergency fund, put away a percentage in savings…and enjoy life!
Tip 5: Be aware of blindspots.
Here’s a crash course in some of the biggest blindspots young adults encounter, and how to avoid them. I often see graduates go crazy with credit cards without understanding the repercussions. I get it, you go from the Ramen Noodle diet to now having access to thousands of dollars on demand. But maxing out your credit cards can seriously damage your credit reputation while piling on more debt. On the flip side, I see graduates who are terrified to put themselves in the credit game at all. This eliminates the chance to get in on amazing perks like free flights, discounts, and other bonuses while building an excellent credit report. Therefore, it really comes down to being financially responsible and fully understanding your credit limits!
Stick to these early financial habits and I have no doubt you’ll find a bright future ahead! Have more questions? Get in touch with me here: jeanne@kgroupconsulting.com. Wishing you lots of happiness and success as you start this exciting new chapter!
