Since you finished graduate school, your financial priorities have probably shifted significantly. Beyond pursuing your professional goals, you might be looking to buy a home, get married, start a family or launch a business—or all of the above.
You need to amass some savings and create a plan that will help you achieve those goals. Here are four key ways to start building a strong financial foundation in the post-grad school years:
1. Keep tabs on your credit score.
If there’s one number you should know, it’s your credit score. Lenders pull your score before deciding whether to loan you money and at what interest rate. If your score is lagging—say, below 700—you could pay higher interest rates on everything from your mortgage to auto loans to business loans, and it could cost you thousands of extra dollars over the life of a loan.
The credit score most commonly used by lenders is Fair Isaac’s “FICO” score, though several credit agencies have their own scoring systems. Some credit cards now give customers their scores on their monthly statements, or you can receive it using any of these free online credit-monitoring tools such as Credit Karma, Credit Sesame and Credit.com.
Once you know your score, your banker can help you interpret it and explain ways to improve it.
2. Refinance your student loans at a lower rate.
Student debt may be a significant financial obligation at this point in your life. Consider refinancing your loans into one large loan and taking advantage of today’s low interest rates. This may lower your monthly payments and allow you to put that savings toward other goals. It can also simplify your life because you’d be making just one monthly loan payment, rather than juggling multiple loan bills. Keep in mind that these new loans may require you to give up special features of federal student loans like loan forgiveness and income-based repayments.
3. Start seriously squirreling away money.
Putting money into a tax-deferred retirement plan and building up personal savings are the only way to ensure that you’ll have the financial resources you need to meet future goals, including building a healthy nest egg for retirement.
If you have access to a 401(k) or another employer-sponsored retirement plan, contribute at least enough to get the full matching contribution that your employer provides. You may need to contribute more than that, however—10 or 15 percent of your income—to have enough saved up by retirement.
If you own a business, you can contribute to a tax-advantaged retirement plan for self-employed individuals, such as a solo 401(k) or a SEP-IRA.
4. Establish a relationship with a bank.
In the years after graduate school, your life can change immensely. It’s a good time to start working with a bank that provides personalized service and insights as you pursue specific financial goals.
Form a one-on-one relationship with a banker who can guide you through key milestones, whether that’s getting approval on your first mortgage, looking at smart ways to reduce debt or finding financial solutions that meet your needs.
Before you get too far along in your professional and life goals, it’s important to establish a relationship with a bank that will be there for you every step of the way.