Navigating finances can be overwhelming for new college grads. Here are some tips

A tassel with 2023 on it rests on a graduation cap
Deciding how to manage your finances after graduating from college can be overwhelming, given the many competing demands.
(Alex Brandon / Associated Press)

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

We asked 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.

Make a budget

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


After accounting for large expenses such as rent, car payments and food, you can 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 said. Writing out the budget helps you figure out what you can afford and when, she said.

“We conceive of budgets as restrictive things that keep us from having fun, but you should be thinking of it as a way of controlling how your money is spent. If you don’t know, you’ve sacrificed all control,” Lowry said.

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Factor in taxes

Melissa Jean-Baptiste, a financial educator and the author of the book “So… This Is Why I’m Broke,” said it’s easy to forget to account for taxes, so you might have less take-home pay than you anticipated. Retirement contributions and other deductions can further lower that amount.

Jean-Baptiste suggested setting aside some time to understand your first paycheck and all those deductions. “Take yourself on a money date so you understand how much you’re bringing home and how much you have left to save and invest,” she said.

Start saving

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, advising that they save at least 1% of each paycheck and increase that amount over time.


“There will always be a more immediate excuse to delay saving for retirement,” he said.

He also suggested 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 probably will earn more than it would sitting in a traditional bank’s checking or savings account.

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Protect your credit

As you build your independent financial life, making at least the minimum payments on your student loan and credit card accounts can help protect your credit. Missing a payment, Lowry said, could damage your credit score. She suggested focusing on paying down any high-interest debt first to reduce the total amount going to interest.

Lowry also suggested freezing or locking your credit, which makes it much harder for identity thieves to apply for new credit in your name. Just remember that if you freeze your credit, you’ll also have to thaw it if you want to apply for credit yourself, she says, adding, “you might want to wait until you’re through a period of time when you’re applying for new accounts.”

Learn from mistakes

Kennedy Reynolds, chief education officer at Acorns, a financial services company, said mistakes are part of the learning process, whether it’s overspending or accruing credit card debt, but the key is to learn from the experience.

“If you have debt to pay down, take that paycheck and split it up” toward those bills until they are paid off, she said. “Try to picture yourself later and know that the choices you’re making now will have a long-term impact.”

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Look beyond your paycheck

Linda Whiteman, a personal finance teacher at Outschool, an online learning platform for kids, teaches her students to think entrepreneurially. After all, she tells them, most millionaires are business owners.

“You don’t have to work for someone,” she said. She asks her students to consider what they can teach others, whether offering piano lessons online or creating digital art. Pursuing additional income outside of a paycheck can help grow wealth, she said.

Jean-Baptiste found success doing exactly that: She used her experience as a teacher to create and sell lesson plans online. “I was bringing in $10,000 a year that I could put toward debt,” she said. Her lesson plans eventually turned into the financial literacy business that she operates today.

Earning additional income outside of a paycheck, she said, “can be a game-changer” — financial wisdom that applies at any age.

Palmer writes for personal finance site NerdWallet. This article was distributed by the Associated Press.