Recent Graduates

Financial Planning Checklist for Recent College Graduates

According to the National Postsecondary Student Aid Study (NPSAS), graduating seniors with educational debts carry an average debt load on the order of $20,000. More and more, college students are beginning their working lives with fairly heavy debt loads. It’s more important than ever for newly-minted grads to hit the ground running with a plan for their finances.

Here are eight key things new college graduates should give attention to:

  • Understand How Your College Loans Work – There are lots of resources for understanding educational loans at and
  • Don’t Mess with the IRS – Once you start working, be sure that you have a rough idea of how much you should have withheld from your paycheck for taxes. If figuring out how much to pay in estimated taxes is too overwhelming, the last thing you want to do is avoid it altogether.
  • Get Health and Disability Insurance – Many employers provide group health insurance coverage that can be paid for through payroll withholding. As a new college graduate, you may feel invincible, but if you break a leg or come down with appendicitis, not having health insurance could leave you stuck with big-time debts.
  • Hold off on Buying a Car – A lot of people don’t realize that a car is usually one of the biggest sources of household spending. If your circumstances require that you own a car, check out a good-quality used vehicle.
  • Start Saving for Retirement – When you’re just out of college, retirement probably seems like a distant goal, but the sooner you start saving for it, the easier it will be to do. If you want to be able to retire early, you’d better start saving early.
  • Work out a Rough Spending Plan – If you start planning your spending now, you can develop good habits that will make your life a lot easier. Try using one of the online budgeting systems, like or so that you can minimize the amount of effort required to get this done.
  • Fight the Urge to Splurge – If there are some cool but expensive items that you’re dying to have, start saving for them. Buying stuff with credit cards should be avoided.
  • Start An Emergency Fund – It’s good to be prepared for the possibility of a loss of income due to illness or a layoff. Set a goal of building up an adequate emergency fund over a couple of years. An emergency fund will provide you access to cash in the event of an unplanned event. The guideline is to have a fund that covers 3-6 months of living expenses.