4 Financial Tips for Recent Graduates

As you complete college, you probably have a whole list of new challenges you need to tackle. Finding a job and paying off student loans are just a few things that are on your to-do list. While this may be an exciting and stressful time for you, make sure you keep a close eye on your finances. If you don't have job yet, you may find yourself using your credit card and savings to pay for everything, but you should avoid this as much as possible. You don't want to sacrifice your credit score and savings you have built up in order to purchase an extravagant graduation present for yourself. As you are figuring out what to do with your life after college, be sure to follow a few of these financial tips:

Apply for new cards wisely
Credit card providers may be sending you solicitations to sign up for a special graduate credit card. While you may need to get a new card, you should take your time picking one out. When you apply for a credit card, you will get a hard inquiry on your credit report. This will result in your score being knocked down a few points, which is the last thing you need at this time. And if you are constantly meeting with credit card companies or lenders to apply for these cards, you will see your score sink pretty fast. Look at all of your options and decide if opening a new account is right for you at this time.

Avoid overspending
While building credit after graduation is important, don't use your card for every single item you need. This could cause you to overspend, which will raise you credit utilization ratio. To prevent this, try creating a budget for yourself. By designating a small part of your budget to only credit card purchases, you will be building up credit in a healthy manner.

Pay your bills on time
This may seem like the easiest thing to do, but you may be surprised by how many people forget to make their payments on time. This can be one of the worst things you do to your credit score, as you will be charged a late fee and your score will drop. If you continue to miss payments or not pay back your balance, you could be sent to collections, which will be a huge blemish on your credit report.

Make sure you are insured
Signing up for insurance may not be a major priority when you're a new college grad, but you should consider it. Life is unpredictable, and you never know if you will be injured and have to go to the hospital. These bills can be very expensive if you don't have insurance, and not paying these bills will result in them being sent to collections. If you are still unemployed, new health care laws allow you to stay on your parents' health insurance policy until you're 26, which is advisable.