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The Resource Center Credit Fraud & Credit Monitoring | article

Managing Your Finances After College Graduation

Though college students often consider themselves independent, many might still find personal financial management to be a foreign concept. Some might have relied on their parents to handle much of their finances while in school, an arrangement that may need to change once they graduate. Being on top of their finances — including their credit scores* and reports — may help recent college graduates avoid falling into debt.

Determine Debt Level and Make a Financial Plan
Recent college graduates need to get an idea of what they're dealing with in terms of debt and income once they finish school. This includes sitting down and tabulating all the debt they may have accrued during their years in college. While many college students likely have some sort of student loans to pay off, others might have also built up debt in the form of credit cards, auto loans, phone payments and insurance bills. It's crucial for graduates to determine just how much they owe, because their monthly expenses could affect what type of job they take and what type of housing they seek.

Once they're aware of their debt level, college graduates can begin to formulate a financial plan. That can include the following steps:

  1. Review credit reports and scores — Reviewing their current credit status can help graduates determine their financial standing, providing them direction when they look to apply for any new loans or take out any additional lines of credit. Since some college students' credit situation is relatively dormant while they're in school, they may have unknowingly been a victim of identity theft. Obtaining this information will provide them a starting point on the way to addressing any credit issues.
  2. Consider closing unused credit accounts — Though they'll want to keep at least one credit card active, closing any other idle credit accounts may also reduce students' risk for identity theft.
  3. Develop a budget — Graduates should weigh their income against their expenses, prioritizing important bill payments and cutting back when appropriate. It's also important for consumers to be aware of their projected expenses before applying for a job, since that can impact their salary requirement.
  4. Formulate a savings strategy — A strong savings account can be a vital resource in times of emergency or trouble. College graduates are advised to make room in their budget for savings. Treating the matter as a monthly bill payment might provide the right motivation to contribute to savings regularly.

*The scores you receive with Identity Guard® are provided for educational purposes to help you understand your credit. Lenders use many different credit scoring systems, and the scores you receive with Identity Guard are not the same scores used by lenders to evaluate your credit.

Credit scores are provided by CreditXpert based on data from the credit reporting bureaus.