Money tips for new grads

Congratulations! You’ve done it! You’ve survived four years as a “starving student”–forgoing lots of luxuries and instead using what little money you have to pay rent and tuition, plus buying those ridiculously expensive books. I know you’re tired of being broke but  now you’re on your way. Soon you’ll have a real job and you’ll be able to have the life you’ve always wanted, the one you’ve worked so hard for.

But before you do, here are a few real-world lessons on money management to help you get on your way. These are some things I wished someone had told me before I donned my cap and gown. I hope they can help you now.

Your finances need a check-up

Take a good, hard look at your balance sheet. List all the debt you have, as well as the expenses and income you expect. Make a budget based on that information. It’s really helpful to see this on paper so you can get a better picture of how things stack up at the end of the month. Oh, and when you’re listing these numbers, remember to find a way to save. Cut out extra expenditures wherever possible: Are you really using that gym membership? Could you work out at home instead? Could you stop renting movies and set up a cheaper Netflix account? Do you need to go out on both Friday and Saturday nights?

It may feel daunting now, especially if you have student loans and credit card debt, but saving even just a few dollars a day helps you develop a habit of saving. And that will help you so much in the long run. (Just look at how much Americans are in debt. You can avoid all that with some simple habits.)

Manage your money with a little help

Now that you have your balance sheet in place, check out how your bank can help you manage your money. Have you bounced any checks? Ever been late on a car payment? Most banks offer free overdraft protection so you can avoid penalty fees for an overdrawn account, online bill pay to make paying bills fast and convenient, and e-mail or SMS alerts to remind you when a payment is due so you can avoid late fees and dings on your credit report. (Read our post, 5 easy steps to avoid bank fees, for more tips.)

Beware the credit card

You probably have at least one credit card you need to pay off. A new study by Sallie Mae finds that the average undergraduate carried $3,173 in credit card debt in 2008, the highest level since Sallie Mae began collecting this data in 1998.

If you carry any credit card debt, try to pay it down as quickly as possible. (It could take you years to pay off a credit card if you just pay just the minimum due every month.) And while you pay off your existing debt, try to use your credit card only in emergency situations. Spend only what you have. It’s a lesson a lot of us are learning the hard way as we try to pare back, given this recession.

And, while you’re managing your credit card debt, we have tips on improving your credit score too, since the higher the score, the better the loan rate you’ll be able to get when you’re ready to buy that new car or your first home–hey, the time will come before you know it!

Start saving for retirement

I know it also sounds crazy to think about retiring when you haven’t even landed your first job yet, but this is so important. Trust me on this.  If you start stashing away money for retirement at age 25 as opposed to 35, and you invest it wisely, you could have hundreds of thousands of dollars more by the time you retire.  (Check out this retirement calculator to see for yourself.)

If you want more savings tips, check in with us regularly. We have all kind sof advice, from getting the most from your tax filings to getting rid of all those pennies in your pocket. You can also stay up-to-date with the latest ‘Grow Your Green’ posts; just follow me on Twitter.com/CashCat and join my network on Facebook. I’ll let you know when we’ve got new stuff on here.

Oh, and again, CONGRATULATIONS, graduate! Now it’s time to make your place in the world and we’re here to root you on! Now, go get ‘em!