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10 Money Rules Every New Graduate Needs to Understand

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Linsay ThomasGuest Blogger
August 26, 2016 · 1.5k Views

Many people graduate from college with a 4.0 GPA, but have no clue about finances. They may have never used a credit card or checkbook or even held a job. However, by the time they enter their late teens, they should be developing financial skills that will help them create budgets so they can save money and build wealth.

Source: pdx.edu

Unfortunately, many schools focus on teaching students about subjects that won’t help them in real life – like history or physics. Money management is a very important subject that every person should take the time to learn if they want to succeed in life, However, unless a person majors in finance in college, they likely won’t be taught any skills in this area. This means that the parents have to step in, or the child has to find out on his or her own – and these real-life lessons can be hard to learn.

If you’re currently in college, what financial skills should you learn before you graduate? If you’re a parent of a high school or college student, what should you be teaching your child about money? Read on to find out 10 important financial rules every person should know by the time they graduate from college.


  1. A budget is a necessity. You’ve probably heard the saying that money doesn’t grow on trees. When it comes to money, nobody has an endless supply. Once you blow through it, you have to earn more. That’s where creating a budget comes in. You must set aside money for necessities and determine how much money you’ll have once your bills are paid. Unfortunately, college students spend 40% of their budget on nonessential items like snacks and electronics. You can use an app like Mint to help you track expenses. You can also create a Google or Excel spreadsheet to create spending categories and limits. You’ll get a closer look at your spending and see where you can cut back so you don’t overspend.

    Source: blog.credit.com
  2. Know how to build credit. Lenders want to know how responsible you are with debt. That means they like to see customers who have a history of paying back loans. In order to prove yourself, you have to use credit in some form. You can’t avoid it, as this will end up hurting you in the long run. So take out a small loan or apply for a credit card. Use the credit card and pay it off each month. You can do the same with the loan, or at least make extra payments so you can pay it off sooner.
  3. Avoid drowning in debt. Once you know how to build credit, use it wisely. If you use your credit card to pay for everything, the debt quickly racks up. While you might have a $10,000 limit on your credit card, you shouldn’t be spending that much. In fact, the optimal utilization is under 30%, so you should be keeping the balance under $3,000 if you want a better credit score.

    Source: elitedaily.com
  4. $25 an hour is more like $20 an hour. Once you have a job, you’ll start learning about taxes. Taxes will be deducted from your paycheck, and the amount varies depending on whether or not you’re married or have kids. While you may be earning $25 an hour, your first weekly paycheck won’t be $1,000. Think closer to $800. This is important to know so you can properly budget.
  5. Understand cash flow. It’s important to know how much you’ll get paid and how often (weekly, biweekly, monthly, etc.) so you can make sure your bills get paid on time. Once you get into a groove, you’ll know exactly when bills are due and when you get paid. It’ll become a cycle.

    Source: investopedia.com
  6. Keep an emergency stash of cash. Life is full of surprises. You might get laid off from your job. You might need expensive surgery. Your car might break down. Bad things happen to everyone. Be prepared for the unexpected by having money in your savings account.
    See also: 10 Tips for Building an Emergency Fund & Why It's So Important
  7. Health equals wealth. Staying healthy has its financial benefits. By eating healthier, you avoid becoming obese and prone to common diseases like heart disease and diabetes. By visiting a doctor at least once a year, you can ward off health problems before they become serious.

    Source: verywell.com
  8. Be careful of bank fees. Banks make a lot of money from fees. Some require a minimum balance. If you go under that balance, you pay a fee. If you request paper statements, you must pay a fee. If you use an ATM from other bank, that’s another fee. If your account is overdrawn, you’re charged an even bigger fee. It’s possible to pay hundreds of dollars a year just in fees. Before opening an account, make sure you understand what you will be charged for so there will be no surprises later.
  9. Understand a job’s benefits. Should you go for the job that offers $60,000 a year but no benefits, or the one that offers $55,000 a year, but offers health insurance, paid vacation and a retirement plan? While one job has a higher salary, the benefits of the other job more than compensate for the lower salary. Look at the big picture and take everything into consideration before accepting a job offer.

    Source: blog.quizzle.com
  10. Start saving for retirement. It’s better to start saving sooner rather than later. If your job offers an IRA or 401(k), take advantage of it. Plan to put at least $50 from each paycheck into your account. Many employers offer a match as well, so that could be $100 per paycheck – translating to thousands per year. It might be hard to say goodbye to that $50 at first, but keep it up. By the time you retire, you’ll have a nice retirement fund.
    See also: How Doubling the Cost of Everything Can Turn Into Extreme Savings


The foray into adulthood can be scary enough. Not having much financial experience can make the transition even scarier. By understanding the money rules above, you’ll become more financially prepared for life on your own after college.


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Linsay Thomas is a seasoned writer and editor who has written thousands of articles about topics such as saving money, healthcare, law, pets and education. She hails from California, where she lives with her husband, two children and a menagerie of pets. When she's not writing, she enjoys sports, breeding chocolate Labs and visiting the beach.

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