Advice for grads

Financial tips to start your professional life

For new college graduates, receiving that first post-degree paycheck can be almost as exciting as getting the diploma itself. But it also presents a challenge: Given the many demands on a young person’s budget, how should those funds be managed?

We asked some money experts to share their best personal finance strategies to help this year’s college grads successfully launch their financial lives. Here’s what they said.

1 Find your budgeting style

To figure out how to allocate your money toward needs, wants and everything else, Erin Lowry, author of the “Broke Millennial Workbook,” says that instead of following the latest budgeting trend on TikTok, it’s helpful to just sit down with a pen and paper. “Write down what your big expenses are,” she says.

After accounting for large items like rent, car payments and food, you can then see what nonessentials also fit. “You might want to go out to dinner with friends, build up new work attire or adopt a dog,” Lowry says. Writing out the budget helps you figure out what you can afford and when, she adds.

2 Save smartly

Even if they’re paying off debt, Alex Rezzo, a certified financial planner and the founder of Andante Financial in the Los Angeles area, urges new grads to start saving for retirement right away. “There will always be a more immediate excuse to delay saving for retirement,” he says, but he urges people to find a way to save at least 1% of each paycheck and to increase that amount over time.

He also suggests parking your direct-deposited paycheck funds in an online bank that offers a competitive high-yield account and is backed by the Federal Deposit Insurance Corp. That way, the money likely will earn more than it would sitting in a traditional bank’s checking or savings account.

3 Protect your credit

Making at least the minimum payments on your student loan and credit card accounts can help protect your credit. Missing a payment, Lowry says, could damage your credit sore. She suggests focusing on paying down any highinterest debt first to reduce the total amount going to interest.

Lowry also suggests freezing or locking your credit, which makes it much harder for identity thieves to apply for new credit in your name.

This article was provided to The Associated Press by the personal finance website NerdWallet. Want to suggest a personal finance topic that Quick Fix can address? Email apmoney@ap.org