Just earned your degree? Here’s a few tips on how college graduates can save money.
As a recent college graduate, managing finances can be overwhelming, especially with student loan payments looming, but there are many easy (and important) steps grads can take to begin saving money.
Here are five easy ways college graduates can save money while still paying off student loans:
1. Set up automatic transfers from your paycheck to your savings account.
If you haven’t started saving yet, this is how to begin. It may feel like you don’t have much to save, but even $10 per paycheck will add up. If you get paid twice a month, that’s $20 into your savings account each month. $20 x 12 months = $240 per year. Your savings account is your rainy day fund for immediate, emergency needs, or hopefully to keep saving.
2. Establishing and building your credit score by opening a credit card.
It is essential that college graduates begin building credit as soon as possible. A credit card is the most efficient credit builder, allowing users to add positive stats to their major credit reports on a monthly basis at potentially no cost.
3. By responsibly using and paying off your credit card each month, you can build a strong credit score.
When choosing a credit card, take advantage of options that give you perks for spending. Some give rewards or cash back toward student loans, and airline credit cards give free airline miles toward your next plane ticket.
4. Refinance your student loans.
Student loan interest rates—both private and federal— have been on the steady incline, increasing debt and elongating payments for all borrowers. If you’re having difficulty paying your student loans in full and on time, consider refinancing your student loans.
Refinancing is similar to consolidating, but with the ability to lower both interest rates and payment amounts; it ensures college graduates can save money while paying manageable monthly loan payments.
Find your new & improved student loan interest rate with Purefy’s Find My Rate tool and learn more about student loan refinancing with Purefy.
5. Set up your 401K ASAP.
You’re never too young to start your 401K, and it’s definitely an important factor to consider when evaluating career opportunities and negotiating job offers. Many employers will now match your 401K contribution. If you have this opportunity, take it!
Even if you contribute $10/paycheck twice a month, that’s $40 per month, or $480 per year.
Check out the Citizens Bank 401K Calculator to decide what’s best for you.
6. Start a health savings account (HSA) if possible.
U.S. taxpayers with high-deductible health plans (HDHP) are eligible for health savings accounts. Money in your HSA is tax deductible can only be used toward an approved list of qualified medical expenses. An HSA is available to set up directly through a bank and is sometimes offered by employers with HDHPs. Some employers who offer HSAs will also match contributions, like the 401K match. With employer matches, use your HSA to double your money needed for unexpected medical expenses, annual visits, regular prescriptions, and more. Learn more about health savings accounts >>
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