Millennial With Your First Real Job? How to Manage Your Money and Credit

Now that it's a few months past graduation season and many young people who recently left college are starting their first full-time jobs in the real world, they might be feeling a little more independent. However, with that freedom comes considerable financial responsibility they usually don't teach in college.

Millennials who are just entering the job market for the first time are likely to face a large number of financial challenges. If you're currently hunting for, or have already landed, your first post-college job, you probably know all too well the many financial pressures that can suddenly be placed upon you. That's especially true if you're moving out of your parents' house.

Living on your own takes a lot of work
When you get that first job out of college and decide to live on your own, one of the most difficult things you'll probably have to adjust to is paying bills. Lots of bills. Every month.

Between rent and utilities and cable, the costs can add up quickly, and that doesn't even get into all the food and transportation costs you might face. Budgeting properly for all these expenses, which can add up to thousands of dollars (and sometimes even more) over the course of a year can certainly take some getting used to. You might be at particular risk for spending too much on food, because young people tend to eat out a lot more often than older adults, who usually cook for themselves.

And on top of those bills, you'll probably also have to budget properly for your various credit accounts. That will likely include student loans, credit cards, and even your auto financing. Altogether, these costs, too, can add up to hundreds of dollars a month. At this point you're probably starting to feel the pinch on an entry-level salary, but because maintaining a good credit score is so vital to adult life, you'll need to budget wisely to make sure your debts are low and all your payments are being made on time and in full every month.

Those two factors alone — your payment history and the amount of debt you're carrying at any one time versus your total allowable limits — make up 65 percent of your score all by themselves, so even minimal missteps in those areas will likely land you in some seriously bad credit problems going forward. That, in turn, will probably make it even more difficult to live a comfortable financial life. Conversely, carrying more debt than about 30 percent of your limits and missing deadlines even once or twice can set you back months or even years in terms of the hard work you might have done to build your status.

For this reason, it might be wise to simply rely on credit cards not for everyday purchases, but only as a last resort. Likewise, you may also want to avoid using credit cards to cover shortfalls for necessities, as this can create something of a vicious cycle. Large charges such as these (for rent especially) can add up very quickly, tacking on significant debt and potentially lowering your credit scores somewhat dramatically. Further, that extra balance might make it even harder to afford your other bills the next month.

On the other hand, the benefit of maintaining good credit is that it will help you keep your finances tightly controlled, and allow you to build a healthy borrowing history that will grant you access to the best and most affordable accounts available.

What else do you need to keep in mind?
Another part of living independently that many young people may not always keep up with is making sure they are doing enough to build their savings.

In general, experts say that it's important for people of any age to be putting at least 10 percent of their income into savings every month. Whether that's going into retirement plans like 401(k)a or regular savings accounts at banks, it can be vital to building a bit of a cushion to rely on if you run into a financial emergency, which could happen more often than you think. Everything from unexpected auto repairs or a medical problem can cost you thousands of dollars very quickly, and being in a position to simply dip into your savings without having to worry about your regular income expectations being affected can be critical to maintaining healthy finances.

Finally, if you're trying to get your credit situation together, it's usually pretty wise to order copies of your credit reports regularly and check them for any unfair markings that may appear. If any are discovered, you might want to work with a credit repair law firm, as this may help to alleviate whatever issues may exist.