Five Tips to Help Grads Build Wealth

When you graduate from college, there is so much to celebrate. You have completed your higher education, and when you start a new job, you’ll likely have much of what you need to launch a career, open a retirement account^*, and save for the future. Most grads research for their careers, and that’s smart. But you should also begin your financial education. Learn to invest, understand retirement options, and take advantage of employer benefits. To help, we’ve compiled our top five financial tips for college graduates.

1. Pay Yourself First — When you get your first job, you’ll most likely go through the process of getting acclimated to your new company, meeting with new colleagues and Human Resources (HR) representatives, and hopefully, setting up a retirement account*. Because many college graduates start with lower salaries, they feel as though they need as much cash as possible. Often, they only place a small percentage of their income in their retirement accounts. Between any retirement accounts and your savings, it’s important to set aside at least 10% of your income. Eventually, you’ll want to target 20% to overall savings, but 10% is a good start.


2. Make Sure You Get Your Employer Match — Many employers will match your retirement contributions up to a certain percentage, usually between 1–5%. Absolutely take advantage of this benefit. Make sure to ask your HR representative if you have difficulty understanding how it works. Not all retirement accounts are created equally and range in complexity, so make sure to seek out your HR rep if you need help making the right decisions.


3. Go Easy on Lifestyle Inflation — College students are known for living on the cheap. So it’s no wonder when they receive their first jobs, they tend to over inflate their lifestyle. It’s tempting to rush into getting a new car or buying your first home as soon as you accept your first job. But consider waiting about six months to make sure you enjoy your career and want to stay with your current company before making lavish decisions. You can decide after you know your career is relatively stable whether you can afford to make any upgrades to your lifestyle. Consider also that most student loan payment plans begin six months after graduation. Make sure when deciding on a new car or home that you factor in any student loan payments as well.
Give us a call, or visit your local branch anytime to chat with a personal financial representative. CUSO Financial Services, L.P.* at UFCU offers solutions that can help you get started. Call (800) 252-8311 or (512) 467- 8080 x21081 to learn more.


4. It’s Okay to Live with Your Parents — It’s okay to live with family or take on a roommate, especially if you’re working to save money toward a specific goal. Many recent graduates need a little time to get on their feet. If this is an option for you, it might be wise to take advantage of the opportunity and save money before venturing out on your own. Just be sure to communicate with your potential housemates or family members and set expectations appropriately so your personal relationships remain intact.


5. Spend, Save, Borrow, and Plan — When it comes to being financially literate, it all comes down to understanding the balance of spending, saving, borrowing, and planning. A good balance allows you to prioritize your own needs and also be a contributor within your community. To find this balance, it’s important to budget and track your spending, and once you get the hang of it, you’ll be well on your way to financial well-being.

* Non-deposit investment products and services are offered through CUSO Financial Services, L.P. ("CFS"), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. UFCU has contracted with CFS to make non-deposit investment products and services available to credit union members.