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Despite a challenging year, college grads are feeling hopeful about their financial future

If you’ve recently graduated, here are a few financial steps you should take


The pandemic has been tough on college graduates, but it’s also taught them the importance of money management.

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When it comes to 2020 and 2021, the word “unprecedented” was repeated a lot in the news – and it seemed to describe the years quite accurately.

Every possible facet of people’s lives has been changed, from individual routines to entire industries.

Without a doubt, this is an unusual situation to graduate into. New graduates have had a challenging year that impacted their financial situation and outlook. Yet, despite all adversity, college grads are hopeful about their future and are looking to strengthen their financial health, including their credit.

If you’re a new graduate, you may have faced a lot of uncertainty during the pandemic. But now you can take steps to be in control of your financial well-being and reach your goals, such as paying off debt, growing your savings and improving your credit.

Check out all the answers from our credit card experts.

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College grads had a tough year, but they’re finding new perspectives

It’s already becoming clear the pandemic had a lot to teach us about our finances and will shape our lives for years to come. In particular, new college grads entering the adult world have had their perspectives shaped by this event.

According to an Experian survey from July 2021, 34% of college grads reported that running out of emergency savings shaped their attitudes, and 30% said not having a high enough credit score to get a credit card or loan was a major influencing factor. Another 29% said watching their parents struggle to make ends meet impacted their decisions.

These new grads worry about their financial health. For instance, 55% of respondents said they’re stressed about paying monthly rent and bills, while 43% reported being worried about paying for graduate school or an additional certification (41%). Bad credit was also a concern for 39% of graduates who participated in the survey.

The silver lining: 79% of respondents said the challenges they’ve faced helped them appreciate money management. Many were determined to work on their credit, with 46% checking on their scores more often and 44% working to pay off credit card debt.

This optimism in the face of adversity is certainly a good sign. Dedication is an important part of achieving financial independence.

If you’re interested in working on your finances too, here are some important steps to take while embarking on the next chapter of your adult life.

Financial steps new college grads should take in 2021

Of course, the first step to financial independence is securing regular income. I’m sure you’re already working hard to find a job – or maybe you’ve already got one.

But earning the money is only half the work. The other half is knowing what to do with it.

Never stop self-educating

Success in managing your finances starts with knowing what you’re doing. A lot of financial anxiety comes from the simple fear of the unknown. Read up on the basics of personal finance and credit, or watch personal finance TikToks if that’s more your thing. I recommend sticking to experts like Bankrate, since you want a source you can trust.

Create a budget

Once you start digging into personal finance content, you’ll soon realize a budget is a requirement for a healthy financial life. Knowing where your money is coming in and going out keeps you in control.

This may seem like a daunting task, but don’t get discouraged.

Today, it’s easier than ever to keep track of your budget. No need to write anything down or create a terrifying table with formulas in Excel. You can simply download a budgeting app that looks good to you, sync your accounts, set up your goals and spending limits and voila – you’ve got yourself a budget.

See related: Guide to Mint

Beef up your emergency savings

Another essential step is creating a financial cushion in case of unforeseen situations. An emergency fund keeps your budget and wallet safe when things go wrong, whether your car breaks down, you get a medical bill your insurance doesn’t cover or you lose work.

If you’re not prepared for such emergencies, your budget may take a hit – and your credit too. This is especially true if you get into debt while trying to remedy the situation.

For that reason, experts recommend having at least three months’ worth of expenses saved in your rainy-day fund. Remember, you don’t have to put that money in your savings account right away. You can build your emergency savings at a pace that works for your budget – as long as you make it a priority, as much as possible.

Pay down debt

If you’ve accumulated credit card debt during your time in college, it’s best to take care of it as soon as you can. This type of debt is expensive, and high credit card balances can be hurting your credit considerably.

Aim to keep your credit utilization ratio (how much balance you carry compared to your credit limit) under 30% for healthy credit. Better yet, make it a habit to pay off your credit cards in full every month. That way, you won’t ever have to worry about interest and can take advantage of rewards or cash back if you have a rewards credit card.

Build your credit

Speaking of that, the best credit cards require good credit. To get there, exercise good credit habits: Always pay your bills on time, keep your card balances low, only apply for credit when you really need it and avoid closing credit cards that don’t fit you anymore. Remember, you can always try to product change by contacting your credit card issuer.

If you don’t have a credit card yet, it’s time to consider getting one. A credit card is one of the best tools for credit building when you manage it responsibly.

Even without good credit, there are plenty of excellent credit cards for college graduates, including secured cards and cards for bad or fair credit.

Monitor your credit to stay on top of any changes – and to motivate yourself to keep up the good work.

Bottom line

Graduating college is always an exciting time, but it also comes with the stress of figuring out your next steps. That’s especially true now that the world is working to leave the pandemic behind. Numbers show recent graduates feel the financial impact of the pandemic, which affects their attitudes and decisions. But at the same time, they’re optimistic about their financial future.

The best way to put your money worries away is by gaining financial know-how and taking steps toward establishing financial independence. Building good credit is another essential milestone on your path to financial well-being.

If you’re looking for a credit card to help you along the way, check out CardMatch, where you can browse credit card offers without impact to your credit.

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The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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