For the next group of college graduates, the main concern post graduation is job and financial security. With surmounting student loans, credit card debt and never ending future expenses, financial independence seems next to impossible to obtain for graduates. According to experts, millennials, the population of individuals born between 1982 and 2004, live paycheck to paycheck, making it next to impossible to save for their future, while paying off student loans and debt accrued during their college years.
The key to college graduates gaining an understanding of their finances is to learn to access and understand their credit reports and credit score. Credit scores are so important for consumers because lenders use their scores as a benchmark for determining whether or not to extend credit. If a consumer has a decent credit score, they will be eligible for loans and credit card with more favorable interest rates as opposed to consumers with lower credit scores, who either will be denied or offered extremely high interest rates. The first step towards having a good credit score is to build good credit. The best way to build positive credit is to start with a variety and make timely and full payments. Pay down your credit in full every month and always pay when you bills are due.
As a graduate, it is easy to fall into a trap of accumulating debt. The best way to avoid the “why pay now when you can pay later” philosophy, is to create a budget. The easiest way to create a budget is to make a list of your expenses, including bills, necessities, entertainment and an emergency fund and compare these expenses to your earnings. If you are realistic about what you can spend you should be able to survive without falling into further debt and build good credit for the future.
Next experts suggest graduates work toward paying down their student loans. With college becoming increasingly more expensive, the amount of student loans doubled over the past 20 years. If paying down your student loan seems next to impossible, there are agencies set up specifically by the Department of Education to help graduates figure out a payment plan that will be attainable to help pay of the balance of a loan.
Setting realistic goals for yourself post gradation will help millennials obtain financial security without sending them into greater debt. If you are in need of financial advice or feel your rights may have been violated, contact SmithMarco, P.C. for a completely free case review.