Financial Wellness
Student Loans & Smart Money Moves for New Graduates
If you are graduating college this month, congratulations! The next few months will bring about many changes—and a lot of adulting. And if you relied on federal student loans to help pay for your education, life is probably feeling even more real now that your first payments will be coming due.
After graduation, most borrowers get a six-month grace period before student loan repayments begin. That may seem like a lot of time, but it will fly by quick! You'll want to make sure you're launching into adulthood on the right foot—for both your student loans and the rest of your finances.
Watch out for scams. Never pay an outside company for help with your federal student loans. Your loan servicer will help for free. Contact your servicer directly for information on income-driven repayment plans, student loan forgiveness, and more.
Check your monthly payment amount. See if you're on an affordable repayment plan. The standard repayment plan is based on your loan balance, but you can opt for a plan based on your income instead. Use this helpful online loan simulator to compare your payments under different plans.
Consider autopay with your loan servicer. It's a good way to avoid late or missed payments. Paying on time consistently will help protect your credit score, and putting payments on automatic means one less thing to remember during this busy time of transition.
Here are a few tried-and-true tips to get you on the right financial footing right out of the gate:
Create (and stick to) a budget. A budget or spending tracker (like our Financial Management software in Digital Banking) can help keep you on target, showing you exactly where you're spending. If you're looking for an easy way to get started, consider the 50/30/20 rule (50% for needs, 30% for wants, 20% for savings).
Prioritize emergency savings. Having money saved can be a lifesaver if you have an unexpected large expense or loss of income. A general rule of thumb is to save enough money to cover three to six months of basic living expenses. Even if you can only put away a little money each month, it's a good place to start.
Payoff debt faster to save more. Starting sooner rather than later is always a smart move. Try to pay your bills, including your credit card balance, every month, on time. Life happens, and that's not always possible, but making it a habit will save you a lot of money in interest.
Let technology be your friend. This is a busy time in your life, and the more you can automate, the easier life will be. Just like with your student loan payments, set up automatic payments for your other monthly bills like utilities, car payments, and insurance premiums. Set up recurring transfers to savings, account alerts/reminders, automatic bill payment, and more in Digital Banking.
Save early for your future self. The sooner you start saving for your future, the better. Consider opening an Individual Retirement Plan (IRA), and be sure to take advantage of your employer's 401(k) plan (especially if they offer a match, it's literally free money!). Investing at young age gives your money time to grow thanks to compounded growth.
Mastercard® credit cards with low rates, rewards, convenient online payments, and paperless statements.
Personal Line of Credit so you have easy access to additional funds when you need them.
Auto loans with great financing options to help you purchase your next car or truck.
Flexible IRA options, since it's never too early to start saving for retirement.
Thousands of fee-free ATMs – find the one closest to your new place or job.
Adulting can be a bit scary at first. If you are feeling overwhelmed, reach out to us. We are your credit union, and we are here to help. We welcome the opportunity to talk with you about your financial needs and answer any questions you may have.
And remember—even if you don't have it all figured out (spoiler alert: none of us do!), you're young and time is on your side. Building strong financial habits now will pay off big throughout your life.
After graduation, most borrowers get a six-month grace period before student loan repayments begin. That may seem like a lot of time, but it will fly by quick! You'll want to make sure you're launching into adulthood on the right foot—for both your student loans and the rest of your finances.
What you need to know about student loans
Know your loan servicer. Make sure you know which company is handling your student loan repayment bills. The government assigns a "loan servicer" to every borrower. If you're not sure, Studentaid.gov can help. If you move after graduation, remember to update your contact information with your loan servicer.Watch out for scams. Never pay an outside company for help with your federal student loans. Your loan servicer will help for free. Contact your servicer directly for information on income-driven repayment plans, student loan forgiveness, and more.
Check your monthly payment amount. See if you're on an affordable repayment plan. The standard repayment plan is based on your loan balance, but you can opt for a plan based on your income instead. Use this helpful online loan simulator to compare your payments under different plans.
Consider autopay with your loan servicer. It's a good way to avoid late or missed payments. Paying on time consistently will help protect your credit score, and putting payments on automatic means one less thing to remember during this busy time of transition.
Strategies for saving and spending after college
Whether you have student loans or not, your 20's are the time to develop smart financial habits that will benefit you post-graduation and throughout your life.Here are a few tried-and-true tips to get you on the right financial footing right out of the gate:
Create (and stick to) a budget. A budget or spending tracker (like our Financial Management software in Digital Banking) can help keep you on target, showing you exactly where you're spending. If you're looking for an easy way to get started, consider the 50/30/20 rule (50% for needs, 30% for wants, 20% for savings).
Prioritize emergency savings. Having money saved can be a lifesaver if you have an unexpected large expense or loss of income. A general rule of thumb is to save enough money to cover three to six months of basic living expenses. Even if you can only put away a little money each month, it's a good place to start.
Payoff debt faster to save more. Starting sooner rather than later is always a smart move. Try to pay your bills, including your credit card balance, every month, on time. Life happens, and that's not always possible, but making it a habit will save you a lot of money in interest.
Let technology be your friend. This is a busy time in your life, and the more you can automate, the easier life will be. Just like with your student loan payments, set up automatic payments for your other monthly bills like utilities, car payments, and insurance premiums. Set up recurring transfers to savings, account alerts/reminders, automatic bill payment, and more in Digital Banking.
Save early for your future self. The sooner you start saving for your future, the better. Consider opening an Individual Retirement Plan (IRA), and be sure to take advantage of your employer's 401(k) plan (especially if they offer a match, it's literally free money!). Investing at young age gives your money time to grow thanks to compounded growth.
Our resources available to you
We offer a complete menu of loans and financial services, geared to help lay a solid financial foundation for your future.Mastercard® credit cards with low rates, rewards, convenient online payments, and paperless statements.
Personal Line of Credit so you have easy access to additional funds when you need them.
Auto loans with great financing options to help you purchase your next car or truck.
Flexible IRA options, since it's never too early to start saving for retirement.
Thousands of fee-free ATMs – find the one closest to your new place or job.
Adulting can be a bit scary at first. If you are feeling overwhelmed, reach out to us. We are your credit union, and we are here to help. We welcome the opportunity to talk with you about your financial needs and answer any questions you may have.
And remember—even if you don't have it all figured out (spoiler alert: none of us do!), you're young and time is on your side. Building strong financial habits now will pay off big throughout your life.
Resources: Sofi On The Money, Studentaid.gov
