6 Money Tips for Grads

Writing checks

How to use a checking account – Whether you are heading off to college or starting down your career path, you need to know how to manage a checking account. Just because the monthly statement says you have $1,000 doesn’t mean you really do! Have somebody you trust teach you how to “reconcile” your monthly bank statement – identifying which checks haven’t cleared yet … and those you forgot to record. You may have “overdraft protection” at your bank, but often it is extremely expensive -- $35 for every check that the bank pays even when you didn’t have the money. And you’d better come up with the shortage pretty quick if you want to keep the account open. Sit down with whichever parent pays your family’s monthly household bills – so you get an idea of what it takes to cover groceries, utilities, rent, and other expenses. There are short courses available on the internet that will help a new checking account holder learn how to manage an account responsibly.

Open a savings account!

How to save – If you don't already have a savings account, open one. Savings accounts are better than checking accounts in one key area – it’s more difficult to get the money out. You can’t just write a check. You have to go into the bank and withdraw it. Sure, the money’s yours. Nobody’s going to tell you that you can’t have your cash. However, just the fact that you have to go to the trouble of going to the bank and filling out a withdrawal slip will help you to save. Develop a savings plan and set aside a certain amount of your monthly income for a “nest egg” – extra money that you may need later to buy a house or a car or, who knows, a wedding ring! A savings account will also help you cover unexpected expenses. If the transmission falls out of your car, it’s really great to have some money in the bank so you can fix it!

Proect yourself and your money!

How to protect your credit score – A credit score tells potential lenders how well you have used credit in the past and how likely you are to repay in the future. It impacts the types of loans you will be approved for and the better your credit score, the better interest rates you will receive. Get a copy of your credit report. If you haven't established a credit history, you might not have anything on your report, but it is a good idea to monitor the report on a regular basis. Remind them that a credit report is a record of your past financial transactions and that an important part of using credit wisely is to annually review your credit reports. Checking your reports will help you spot errors and can serve as a safeguard against credit fraud.