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Knobull Helps New Job Seekers Improve Their Financial Literacy
Here are tips to prepare for life after graduation and avoid financial pitfalls."
1. Make a plan for student loans
Before you leave college, it's important to understand your student loan situation, including:
Keep track of federal student loan news to see if any of your debt will be forgiven or if you need to prepare to begin making payments.
2. Create a budget
A budget is crucial to avoid overspending and unnecessary debt and build your savings. As you take on more financial responsibilities, your budget will keep you on track. To help this process, you can request a budgeting guide at the Knobull Contact page.
Experts recommend budgeting rules in which 50 percent of your post-tax income goes to needs, 30 percent to wants and 20 percent to savings.
3. Build credit
Building good credit is key to future financial success. Start by obtaining a credit card and using it responsibly, by making payments on time and keeping your debt balance relatively low. Not only will this help you avoid fees and high interest costs, it also contributes to building a good credit score.
4. Plan for retirement
Although retirement seems far away, it's never too early to start planning for it. Many employers offer a 401(k) retirement plan or similar depending on the type of work and may match your contributions up to a certain percentage. If your employer doesn't offer a retirement plan, you can open an IRA.
5. Understand the fees on your financial accounts
While in college, you may have had a student bank account that didn't charge any fees. As you transition into a standard bank account, it's important to be cautious of monthly maintenance fees and overdraft fees.
6. Save for emergencies
Unexpected expenses can occur at any time, which is why having an emergency fund is important.
Aim to save at least three to six months' worth of expenses in an easily accessible savings account. That way, you'll have back-up funds to help cover costs like emergency car repairs, medical bills or a sudden job loss.
Financial management after college can be daunting, especially as your financial goals and responsibilities become more complex. It's prudent to invest in skill building education by tapping Fast Company edX at the Knobull homepage.
Bentley concluded, "Make sure you understand what expenses you're taking on — such as student debt repayments, rent and utility bills — and keep them organized in a budget. As you develop more financial experience and good savings habits, you'll be able to save more."
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