You did it. You officially graduated into the real world.

With this newfound freedom comes new responsibilities like paying bills, building savings, contributing to retirement, paying down debt and much more. But before you get overwhelmed, take a deep breath. The first step to tackling your post-grad finances is coming to terms with them.

Here are six tips for starting your adult life on the right foot.

1. Create a budget

First things first, figure out a realistic budget for yourself.

Most recent grads aren’t swimming in money, and many are facing a tough job market because of the pandemic, making now an even more critical time to create a budget.

“Now is the time to take stock, prioritize which expenses are essential and look for ways to build a cushion and (look for) potential investments for the future,” says Linda Greenfield, a career coach at Essential Career Counseling in Los Angeles.

Greenfield recommends that recent grads take a course in personal finance before starting their career.

A popular budgeting method that’s known for its straightforward approach is the  50/30/20 budget rule. The method suggests dividing your post-tax income into three categories: needs, wants and savings.

  • 50 percent of your take-home pay should go to essential needs like health insurance, housing, transportation and groceries.
  • 30 percent should cover wants (or non-necessities), such as streaming-service subscriptions, concert tickets, dinners out or vacations.
  • 20 percent should be set aside for savings and investments.

You can keep yourself accountable and on track with a budgeting app, like Mint or You Need a Budget (YNAB). These digital tools offer real-time alerts and track your spending and savings when you connect your banking accounts.

2. Pay yourself first

When first starting out, you likely won’t have a ton of money leftover with a majority of your income going toward living expenses (especially if you’re planning to move to a big city) and other necessities.

But remember that you should always pay yourself first. That means setting aside a portion of your monthly income, ideally 20 percent, in savings.

Taking this step will help you build your emergency fund, so if you happen to fall on hard times, you’ll have a safety net to catch you. Now, in a pandemic, the importance of emergency savings has been highlighted for millions: 23 percent of Americans say their biggest financial regret was not having saved enough, according to a recent Bankrate survey.

“Successful saving is all about the habit,” says Greg McBride, CFA, Bankrate chief financial analyst. “The best way to establish that habit is to automate the savings, such as with a direct deposit from your paycheck into a savings account and 401(k) contributions made by payroll deduction. The savings are done before you even roll out of bed on payday morning.”

If you’re just getting started, apps like Digit and Dobot can also help ease you into the habit of saving. The hope is that by automating your savings, you won’t even notice the missing money as you’ve already accounted for it in your budget.

3. Build your credit

Your 20s are a critical time to build your credit.

Your credit score is a metric that lenders use to help determine your creditworthiness and ultimately determines things like what apartments you’re eligible for and what interest rates you qualify for.

One of the most important things to remember about building your credit is that it’s vital to pay your bills on time and in full every month. If this isn’t something that you can commit to, then hold off getting a credit card until you’re in a more secure financial position.

When it comes to applying for a credit card, do some research ahead of time. It’s important to find a credit card that fits your spending habits and one that you qualify for given a lack of credit history.

It’s important that you don’t go applying for credit cards left and right, as that will only hurt your chances of being approved. A good place to start is by using’s CardMatch tool to see what you may prequalify for. You may have a harder time getting approved for a credit card during the coronavirus crisis.

“It’s definitely harder now, but not impossible,” says Ted Rossman, industry analyst at “I’d suggest student cards and secured cards as good ways to get started. They’re not as selective about credit quality, and using them responsibly will boost your credit score. There’s also a growing class of startups targeting young adults, like the Petal Card and TomoCredit. They go beyond the traditional credit score and practice cash flow underwriting (taking a detailed look at your income and expenses). Apple Card is also widely available and is unique because you can find out if you’ve been approved or denied with only a soft credit inquiry. All of these are good starter cards.

If you’re not quite ready for a credit card, Rossman suggests giving Experian Boost a try. This is a great tool for those who have a limited credit history but have a track record of on-time bill payments, as the service uses that information to boost your FICO score.

Another way to build credit is by asking your parents to add you as an authorized user on their credit card.

4.  Learn how to maximize your spend

Managing a budget and building your savings are both very important and the first order of business when it comes to reaching your financial goals. However, there are also other ways you can stretch your dollar, like learning how to maximize your money whether it be from shopping portals or credit cards — it’s just a matter of knowing how.

The Points Guy, a sister site to Bankrate, is dedicated to teaching you just that. Some of the top, high-spend areas where you may be missing out on points, discounts or cash are:

By adopting these strategic spending strategies, you can avoid leaving any money on the table.

5. Refinance your student loans

If you have student loans to pay back, consider refinancing them. This could be a smart move if you have multiple loans with varying interest rates. Ideally, refinancing would help you get out of debt sooner and possibly reduce your monthly payment obligations.

When deciding whether to refinance, check to make sure that refinancing will actually save you money. Be careful about refinancing federal student loans as doing so might make you ineligible for benefits, like income-driven repayment options, federal student loan forgiveness programs and coronavirus payment relief via the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Currently, federal student loan payments have been suspended until Sept. 30 thanks to the CARES Act. Unfortunately, this does not apply to private student loans. If you’re in the position to continue making payments, you could decrease the life of the loan substantially since these loans are no longer accruing interest.

6. Start investing

You don’t have to be the wolf of wall street to start investing. In fact, it’s a lot easier to get started than you might think.

One of the easiest ways to start investing is by contributing to a 401(k) fund, especially if your employer offers a match. These funds are automatically deducted from your paycheck. Given its tax advantages and potential matching opportunities, this is a great first investment opportunity.

Another good option is investing in an S&P Index 500 fund. This is something the legendary investor Warren Buffet has advised investors on for years as it returns an average of 10 percent annually for investors who buy and hold it.

For those unfamiliar with this type of investment, an index fund merely mimics the stocks in the fund, rather than trying to pick which stocks will do well. So an index fund is a classic type of passively managed investment, and only adjusts its holdings when the underlying index changes, says James Royal, Bankrate’s senior investing and wealth management reporter.

Those are just two of the easiest and least risky investments to get into, but of course, there are plenty of other options to help you start investing.

Bottom line

The earlier you learn how to responsibly manage your money, the better off you’ll be in the future. Life gets busy and surprises happen, so you’ll thank yourself later when you’re prepared for the unexpected.

It’s important to be prepared for emergencies, and responsible money management also grants you the ability to indulge in more fun things like vacation, dinner with friends and a little something special for yourself every now and then.

Featured photo by Nay Ni Ratn Mak Can Thuk / EyeEm of Getty Images.

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