Finances After College

Five-ish Tips to Set Yourself Up for Financial Success

These recommendations are a starting point for you to build a strong financial foundation from senior year through your first couple of years post-graduation. By following these tips, you’ll reduce financial stress and improve your financial well-being in both the short- and long-term.

  1. Assess the Job Offer
  2. Save for Transitional Expenses
  3. Budget Better
  4. Set Financial Goals
  5. Actively Manage Credit

1. Assess the Job Offer

A compensation package is the package of salary and benefits offered to a job candidate by an employer. Figuring out its value is more nuanced than looking solely at the base salary and possible commissions.

Free worksheet: Download our Job Offer Comparison Tool

Consider the following factors that influence the real value of your job offers:

Monetary benefits

These benefits may have a real dollar value assigned to them, such as a professional development allowance. They may be based on a percentage of your base salary, such as a retirement contribution match. Benefits may also have an implied monetary value. Examples include money saved on commuting costs for remote work opportunities or on counseling services provided through an employee assistance program. Other examples include:

  • Paid time off
  • Employer-sponsored insurance
  • Profit sharing
  • Paid parental leave
  • Employee assistance programs for mental health or financial services
  • Company-supplied food and snacks

Non-monetary benefits

These are often values-based benefits that can significantly influence your job satisfaction. For example, some companies sponsor employee interest groups where you can find coworkers who share similar interests to you. These can be helpful to new professionals moving to an unfamiliar city! Non-monetary benefits also include arrangements like a flexible work schedule, company perks like a casual dress code, opportunities for travel, etc.

A work values assessment can help you to name some non-monetary benefits that are personally meaningful to you. There is a values assessment available through the Focus2 on the Career Center website, or you can meet with a career specialist to learn more about work values to consider.

Cost of Living

Cost of living refers to the amount of money it may cost to buy goods and services in one location relative to other locations in the United States. A cost-of-living index includes the costs for housing, utilities, transportation, food, and healthcare. Due to cost-of-living differences, your purchasing power for the same salary declines when living in a high-cost area.

There are cost of living calculators online that allow you to compare the various locations you’re considering after graduation. Use these to make informed decisions when comparing different job offers.

2. Save for Transitional Expenses

There may be a lot more expenses associated with your transition than you think. To prepare your finances for the transition, try to set aside some of your income for the following transitional expenses:

  • Apartment deposit
  • Moving supplies
  • Household items you may need to get established
  • Items/Appliances shared with roommates
  • Cleaning supplies
  • Medicines and first-aid kits
  • Basic toolkit

In addition to the expenses above, aim to save an emergency fund of $500-$1000 before you start your new job. This is the starting point for your larger post-grad emergency fund (see tip 4) goal and can help you get through minor financial emergencies during your transition.

3. Budget Better

A budget is a proactive plan for how you will spend your money and is the foundation for financial success. It is not a record of where your money has gone (for example, your bank account transaction record is not a budget). It’s vital to learn how to and commit to budgeting regularly. Tips and tools to help you budget effectively are outlined below.

Analyze your spending

To make the most accurate budget, track your spending for a few months to build awareness of your day-to-day spending patterns. Since you’ll have a different lifestyle post-graduation, it may take a few months to figure out your post-grad lifestyle. Track your spending during this time. Use the information as a baseline for your budget categories and limits and adjust spending patterns that aren’t serving you.

Create a budget

To create a budget, take your monthly income and “spend” it on paper first. You can use paper, a spreadsheet, or a budgeting app. It doesn’t matter how you do it; it only matters that you do. Allocate each dollar of your income to a spending category like housing, groceries, entertainment, etc.

Don’t forget to “pay yourself first” by dedicating a portion of each paycheck for financial goals like debt repayment and saving for your future. See tip 4 for financial goals to consider in your budget.

Financial coaches in the Office for Financial Success will meet with you for personalized help with budget creation.

Start a revolving savings fund

A revolving savings fund is an account used to save for expected, but infrequent expenses. These expenses add up and are budget busters if you haven’t prepared for them! Figure out your monthly revolving savings goal by calculating your total annual irregular expenses and dividing that amount by 12. Save this amount monthly and withdraw money from the account as those expenses occur throughout the year.

Examples to consider when calculating your savings goal include, but aren’t limited to:

  • Annual events/activities
  • Car maintenance and registration
  • Holiday/birthday gifts
  • Insurance premiums
  • Personal care appointments
  • Pet medications/vaccines
  • Subscriptions due semi-annually
  • Seasonal clothing
  • Property tax

4. Set Financial Goals

The following are important financial goals to work toward. Commit about 20% of your take-home pay toward these financial goals. If you can’t commit 20% of your income to start, dedicate the amount you can afford and commit to increasing that amount by 1% annually until you reach 20% or more. It is much easier to start this habit as soon as you start earning a paycheck than it is to adjust inflated spending down the road.

Most of these goals are long-term savings goals, which means that you will work toward them for more than one year. Don’t be discouraged if you can’t address all of them at once. Do what you can with what you have now and revise them regularly throughout your life.

Save an emergency fund

Aim to save an emergency fund to cover at least 3-6 months of living expenses within the first couple of years after graduation. An emergency fund should be saved in a low-risk account that you can easily access if the need arises. Avoid keeping this fund in your bank account or in an account that’s a little too easy to access, so you can avoid the temptation to draw from it for non-emergencies. Use this fund only for emergencies and prioritize replacing the funds as soon as possible when used.

Pay down debt

Commit to pay more than the minimum payment on any high-interest debt, such as debt from credit cards or private student loans with interest rates in the teens or higher. Strategies like the debt snowball or debt avalanche can help you pay off debt as quickly as possible. Use a tool like PowerPay to create a plan.

Start saving for retirement

Begin saving for retirement as soon as possible once you are earning a paycheck. Time is your greatest asset when it comes to securing your financial future. A person who starts saving at 25 can save less and earn more over time than someone who starts at 30 or 35 because of a concept called compounding. At minimum, try to meet any employer retirement contribution match percentage so you aren’t leaving free money on the table.

Set lifestyle goals

Once you have the first three financial goals covered, start thinking about saving for your lifestyle goals. These could include saving for large purchases like a house or car, funding life experiences like a wedding or having children, or opening non-retirement investment accounts.

How To: Financial Goal Setting

Answer these questions to set effective and approachable financial goals. Consider setting short-term goals that will help you to accomplish your long-term goals.

  • What, specifically, will you accomplish?
  • What is your deadline?
  • What intermediate steps will you take to reach your goal?


  • I will save 3 months of expenses for my emergency fund, totaling $9,000, within 2 years of graduation. To do this, I will set up auto-deposits of $375 from each paycheck into my savings account.
  • I will contribute 3% of my salary toward my company 401k to meet the company match. I will contact human resources within one month of employment to learn how to set up my account.

5. Actively Manage Credit

Your credit is a financial tool that influences more than you may think. You probably already know that your credit report and score can influence whether you can borrow money and how much it will cost to do so. Your credit score and/or credit report can also be used by property owners to decide if they’ll rent to you, employers to decide if they’ll hire you, and insurance companies to decide how they’ll price your insurance premiums. For these reasons and more, it’s important to actively monitor and manage your credit.

Listed below are ways that you can proactively manage your credit:

Credit use

Generally, there is good debt and bad debt. Good debt is debt that may positively influence your long-term financial health, such as debt for a mortgage and student loans (within reason). Bad debt is debt accumulated for depreciating assets like a new car or for consumer goods consumption. It is often high-interest debt that can quickly get out of control.

Credit cards are a tool to build credit that are often misunderstood and misused. As a general rule, credit cards should be used as a method of payment and not a source of funds. This means that any charge made to your credit card should be backed by money you already have in the bank. Although a credit card is a useful credit-building tool, you don’t have to go into debt to take advantage of its utility.

Credit report

Your credit report is a record of your borrowing history. It also includes personal information like previous addresses and any requests made by you or another entity to view your credit report. The information included in your credit report influences your credit score, the numerical value assigned to you that lenders use to make lending decisions.

Set a reminder to check your credit report three times annually. Doing so allows you to correct errors that may negatively affect your credit score. It also allows you to catch potential identity theft! You can access one free report per year from each of the three credit reporting bureaus: Experian, Equifax, and TransUnion. Go to to access your reports.

Credit score

Your credit score is a numerical value that represents your credit history. It is based on five factors: Payment history, amounts owed, length of credit history, new credit, and credit mix. Each of these factors vary in relative importance in the calculation of your credit score. The two most important factors are your payment history and amounts owed, which make up 65% of your credit score calculation.

You have some control over each of these factors and can manage them by following these guidelines:

  • Payment history: Always pay at least the minimum payment on time. Try to pay your total balance if possible.
  • Amounts owed: Keep your utilization ratio below 30%. Your utilization ratio is determined by dividing your total balance by your credit limit. Ex. If you have a balance of $250 on a credit card with a $1000 limit, your utilization ratio is 25%. To keep your utilization ratio low, pay the balance weekly or bi-weekly instead of monthly.
  • Length of credit history: Avoid closing your oldest credit card until you have about 10 years of credit history. If you have a student credit card, you can call the credit card company to ask to switch to a different card instead of closing the account.
  • Credit mix: Lenders like to see that you can manage two different types of credit: Installment and Revolving. Installment credit includes auto and student loans. Examples of revolving credit are credit cards and retail store cards. If you’re concerned about using a credit card, you can apply for a secured credit card through a bank or credit union. These operate similar to debit cards but your payment history is reported to the credit bureaus.

Learn more about how to influence these factors on FICO’s website.


A ‘Keep It Simple’ Post-Grad Financial Roadmap

  • Live within your means
    • Commit to budgeting
    • Aim for 80% expenses/20% financial goals budget split
  • Builda financial foundation
    • Establish credit history
    • Save an emergency fund
  • Have a debt payoff plan
    • >10% = high interest debt
  • Maximize income
    • Meet company retirement contribution match
  • Time (not $) = Wealth
    • Begin saving for retirement as soon as possible