Financial Advice for New Graduates
- Recent college graduates need to make many financial decisions as they start their lives as independent adults.
- Look for ways to save money and track your spending carefully.
- Get a solid handle on your student loans so you can pay them off comfortably.
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When you’ve just graduated from college, you have to find your footing. You may be juggling a world of new expenses, like rent and car payments, while juggling student loans—all on an entry-level salary.
But with the right strategy, you can take control of your finances and start off young adulthood on the right foot. Here are some money tips for recent college grads at a time when living costs are high.
Understand Your Money Personality
When it comes to spending habits, no two people are exactly alike. A good way to get a handle on your money is to identify your personal spending triggers.
You may use retail therapy to alleviate stress. Or maybe you tend to give into peer pressure—for example, agreeing to buy last-minute concert tickets when you were supposed to be saving money.
Acknowledge your spending habits and tweak them so they don't hurt your finances. For example, you may find it hard to say no to dinners with friends at restaurants, even if that doesn't fit into your budget so well. But you can be proactive by suggesting inexpensive dining spots. Or get ahead of the situation by suggesting a weekly potluck dinner where everyone contributes something.
At the same time, you may want to build some room into your budget for spending you know will be hard to cut. If you love socializing, don't fight that urge. Just make sure to keep other expenses to a minimum so you can spend more on social events and outings without racking up debt.
Follow a Budget
You’ve probably seen on the news that inflation has been higher than usual. As a result, everything from housing to food to transportation is more expensive than it was a few years ago. It’s even leading many people to seek debt relief.
That’s why one of the best money tips for recent college grads is to follow a budget. And doing so may be easier than you’d think.
Here are some budgeting options:
Use an app. There are a host of budgeting apps (like PocketGuard, EveryDollar, and YNAB) that can help you track your expenses and make sure every dollar you earn is being spent well. That way, you don’t have to guess where your money goes.
Track your spending on a spreadsheet. Update it regularly. Taking a manual approach may help you understand what your expenses really look like.
Use the envelope system. Envelope budgeting means allocating cash to expense categories. It’s an effective way to budget for hands-on people who prefer a more old-school approach to managing their money.
Evaluate Your Expenses Regularly
You worked hard to earn a college degree and get a job, so it’s natural to want to enjoy some of your money. But as tempting as it may be to rent a nicer apartment or sign up for a bunch of subscription services, keeping your expenses on the low side could help you get to a great place financially early in life.
If you can live below your means, that could help you avoid new debt, build savings, and tackle student loans. So to that end, take a look at your spending from time to time, and ask yourself if there’s anything you can cut back on.
Some ideas include:
Opt for more-affordable housing. If you don’t need a bigger apartment, rent a studio if it saves you a few hundred dollars a month. And be willing to live in an area that’s less trendy but more affordable.
Limit dining out. It’s okay to grab lunch with co-workers, but doing it too often can take a toll on your finances.
Get rid of unnecessary memberships and subscriptions. If you signed up for the gym and you aren’t using it, cancel and find free ways to exercise (walking doesn’t cost a dime). And if you can’t remember the last time you signed into Netflix, it’s a sign you shouldn’t pay that recurring credit card charge.
Stay away from convenience stores. They are indeed convenient, but you pay significantly more for the things you buy. Shop at traditional supermarkets to stretch your grocery budget. Better yet, shop at discount grocers if you have any nearby.
Give up your car. If you’re moving to a city with decent public transportation, you may not need a vehicle. AAA puts the average cost of owning a new vehicle at $1,024.71 per month, so you might enjoy huge savings if you stop driving and take the bus.
Create a Custom Plan for Student Loans
It’s not uncommon to graduate college with student loans. But the sooner you pay them off, the better off your finances are likely to be.
Your approach to paying off your student loans should hinge on the type you have. Federal student loans tend to come with lower interest rates and more repayment options. Private student loans commonly have higher interest rates, and don’t offer protections like income-driven repayment plans.
It’s common for federal student loans to have a grace period of six months after graduation in which you don’t have to make monthly payments. In some cases, you accrue interest on your loans during that time (It depends on the type of federal student loan you have).
If you can start making loan payments right away, it often makes sense to do so. The sooner you make your first payment, the sooner you might make your last payment.
To pay off your student loans efficiently:
See how your current monthly payment fits your budget. If you can pay more, it could be worth doing so, especially if you have private loans with a high interest rate.
Look into an income-driven repayment plan. If you can’t afford your current federal student loan payments, you may qualify for one of these plans. There are several you may be eligible for depending on when you took out your loans, so talk to your loan servicer about the options. Keep in mind that federal repayment programs come with different repayment periods. A plan with a lower monthly payment might mean you pay off your debt over a much longer time.
Consolidate your loans. If you have multiple student loans, consolidating could spare you from keeping track of different due dates. But pay attention to refinance rates, because right now, borrowing rates are high across the board.
See if refinancing a single loan makes sense. If you can find a better interest rate, refinancing could save you money on interest and leave you with smaller monthly loan payments. That said, refinancing typically makes the most sense with private loans. If you have federal student loans you refinance into a private loan, you may give up a number of key protections, including income-driven repayment plans, forbearance, and deferment.
Find a job that offers student loan forgiveness. Certain fields, like healthcare and education, may offer some form of student loan forgiveness.
Earn extra money with a side gig. Since living costs are up right now, much of your paycheck may go to essential bills. A side gig could make it possible to cover your student loan payments more easily.
Save, Save, and Save
Another key money tip for recent college grads is to build an emergency fund. An emergency fund gives you a pile of cash to raid when surprise expenses pop up. It can also help you avoid debt if you lose your job.
To build your emergency fund:
Pay yourself first. Set up an automatic transfer to your savings account so that money lands there each time you get paid.
Bank your raises. As your income increases, send your extra money into savings right off the bat.
Make the most of windfalls. Whether it’s your first tax refund or a generous cash gift for the holidays, putting extra money into savings could get you to a solid emergency fund in no time.
Generally speaking, it’s good to aim for enough emergency savings to cover three to six months of living costs. And as a bonus, right now, high-yield savings accounts are paying nicely, so you might earn a big chunk of interest on the money you tuck away for emergencies.
Start Building Your Credit History
Without an established credit history and score, you may have trouble borrowing money to do things like buy a car. You might also struggle to rent a home. If a lender or landlord can't verify your borrowing history because you don't have one, they can’t know if you're a reliable loan candidate or tenant.
It's important to build credit as a new graduate, and making your student loan payments on time every month is a great way to start doing that. Your payment history carries more weight than any other factor in calculating your credit score, so it's important to make your payments consistently.
Aside from student loans, you could build credit history by getting a secured credit card. With a secured credit card, you put down a deposit that serves as your personal line of credit. As you charge expenses on that card and pay your bill on time each month, that positive behavior gets reported to the credit bureaus.
Even if you don't have great credit, or enough of a borrowing history to qualify for a regular credit card, you can likely get a secured card, because you're essentially putting up the money to charge expenses against it. Your lender isn't taking the same risk as extending a line of credit with a regular credit card.
Find Cheap or Free Ways to Have Fun
As a recent college grad, you deserve to enjoy your life—and that means spending some of your paycheck on fun expenses. Even if money is tight, aim to set some aside every month to do things you love. This way, you always have something to look forward to.
Here are some ideas that can help you have fun without breaking the bank:
Host potluck dinners. It’s expensive to feed a crowd, because grocery prices are up. If everyone chips in with a dish, drinks, or dessert, it’s an easy way to enjoy great food and company on the cheap.
Explore nature. If you like being outside, find hikes or parks you can check out with friends. Or download a geocaching app to add some adventure to your outdoor explorations.
Start a book club. Reading becomes more of a social activity when you meet up with friends to discuss the latest novel you’ve consumed.
Job Hunt Strategically
If you don’t have a job yet, approaching your search strategically could make it easier to land the perfect role.
To find the ideal job, think about:
Your passions. If you love helping people, look for a job at a nonprofit organization. If you’re the creative type, you might thrive at a marketing or advertising agency.
The work-life balance you want. Working in the financial industry might give you a large paycheck, but it might also mean long hours and little downtime. Set priorities, and choose a job that won’t take up more of your time than you’re comfortable with.
Your minimum income needs. If you’re not yet working, you may not have an apartment rented. But you can look at rents in your area and figure out what food, transportation, and other expenses may cost to figure out what minimum salary you need.
What to Do If You Need Help
If you're a new graduate who's already overwhelmed with debt, get help. If you owe money on credit cards and can't keep up with your monthly payments, you may want to look at a debt consolidation loan. The benefit is that you only have one monthly payment to make, and you may qualify for a lower interest rate on your debt, thereby saving you money.
If you feel you truly can't pay off your debt, you can also talk to a debt relief company to discuss your options. Debt settlement typically doesn't work for student loans, but it may give you relief from other debts.
If you're struggling with student loan payments on federal loans, switching over to an income-based repayment plan could provide some relief by lowering your monthly payments. You may also qualify for forbearance or deferment. Both options let you pause your loan payments for a time.
If you have private loans and are struggling to keep up with your payments, contact your loan servicer and see what options you have. Your loan servicer may change the terms of your loan agreement so you can make lower monthly payments. Depending on your situation, the lender may pause your payments temporarily.
Looking for debt relief in Indiana or across the country? The first step is the most important one—learn more.
A look into the world of debt relief seekers
We looked at a sample of data from Freedom Debt Relief of people seeking the best debt relief company for them during November 2025. This data highlights the wide range of individuals turning to debt relief.
Debt relief seekers: A quick look at credit cards and FICO scores
Credit card usage varies significantly across different age groups, reflecting diverse financial needs and habits.
In November 2025, the average FICO score for people seeking debt relief programs was 593.
Here's a snapshot by age group among debt relief seekers:
| Age group | Average FICO 9 credit score | Average Credit Utilization |
|---|---|---|
| 18-25 | 585 | 81% |
| 26-35 | 585 | 78% |
| 35-50 | 586 | 78% |
| 51-65 | 591 | 75% |
| Over 65 | 609 | 69% |
| All | 593 | 75% |
Use this data to evaluate your own credit habits, set financial goals, and ensure a balanced approach to managing credit throughout your life.
Credit card debt - average debt by selected states.
According to the 2023 Federal Reserve Survey of Consumer Finances (SCF) the average credit card debt for those with a balance was $6,021. The percentage of families with credit card debt was 45%. (Note: It used 2022 data).
Unsurprisingly, the level of credit card debt among those seeking debt relief was much higher. According to November 2025 data, 88% of the debt relief seekers had a credit card balance. The average credit card balance was $15,182.
Here's a quick look at the top five states based on average credit card balance.
| State | Average credit card balance | Average # of open credit card tradelines | Average credit limit | Average Credit Utilization |
|---|---|---|---|---|
| Alaska | $18,833 | 7 | $24,102 | 80% |
| South Dakota | $15,343 | 9 | $28,791 | 80% |
| District of Columbia | $13,535 | 9 | $27,261 | 79% |
| Alabama | $13,087 | 8 | $25,731 | 79% |
| Michigan | $13,909 | 8 | $26,156 | 78% |
The statistics are based on all debt relief seekers with a credit card balance over $0.
Are you starting to navigate your finances? Or planning for your retirement? These insights can help you make informed choices. They can help you work toward financial stability and security.
Manage Your Finances Better
Understanding your debt situation is crucial. It could be high credit use, many tradelines, or a low FICO score. The right debt relief can help you manage your money. Begin your journey to financial stability by taking the first step.
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Author Information
Written by
Maurie Backman
Maurie Backman is a personal finance writer with over 10 years of experience. Her coverage areas include retirement, investing, real estate, and credit and debt management.
Reviewed by
Kimberly Rotter
Kimberly Rotter is a financial counselor and consumer credit expert who helps people with average or low incomes discover how to create wealth and opportunities. She’s a veteran writer and editor who has spent more than 30 years creating thousands of hours of educational content in every possible format.
How long does it take to build an emergency fund?
Try to save the first $1,000 within six to 12 months. Be aggressive and make sacrifices. Challenge yourself to make a budget, look for ways to save, and set milestones to reach and celebrate.
Here’s how one family of four might do it if their goal is to save $2,500.
Drag everything unneeded out of the closets and sell it, netting $700
Give up two subscriptions: $40 per month
Shave 10% off the grocery bill: $60 per month
Switch mobile plans: $50 per month
Cut one restaurant dinner out: $100 per month
Cut 10% of driving: $25 per month
Goal reached in less than seven months.
Where should I keep my emergency fund?
Keep your basic emergency fund in a no-fee savings account, separate from your other money but easy to access when needed (not just during business hours). A high-yield savings account is best, but the first priority is to make sure the money is accessible if you need it. If you have to wait two or three business days to transfer the money into your checking account, you might want to set up your checking account at the same bank, or use an online bank that will give you a debit card for easy access to your funds.
Is debt refinancing a good idea for student loans?
Sometimes, but there may be problems. It can be hard to lower the interest rate on a federal student loan because they are already relatively low. Also, if you pay off a federal loan with a private loan, you would give up access to special programs and protections for federal student loan borrowers. In some cases, debt consolidation or refinancing can lengthen the time to repay your loan. That may result in you paying more interest.
What’s the best advice for a new graduate?
Try to get a handle on your finances early on. Get into the habit of budgeting and pay off your debt as quickly as possible. Build emergency savings as soon as you can to avoid new debt, and set financial goals right from the start so you have more time to work toward them.
How do you save money as a new grad?
As a new college grad, you can save money by keeping your biggest expenses, like housing, as low as possible. That could mean getting a roommate, or giving up amenities or square footage. Also do most of your own cooking to save on food costs, and seek out low-cost entertainment. Finally, aim to avoid debt as much as possible by saving up for purchases. The less debt you have, the less money you spend on interest, and the more you can save.
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