How new graduates can prepare themselves for financial success


Graduation season is an exciting time for many families.

Whether graduating from college, high school, or vocational training, this occasion often marks the beginning of a new phase in the graduate’s life.

As graduates mature, their financial responsibilities will only increase. Here are tips to help new graduates achieve financial success.

Start with a plan

As your career progresses and you start to bring in a steady income, it’s essential to make sure you have a budget and a plan.

Graduating can involve many costs, such as finding and furnishing an apartment, so it’s important not to overextend yourself when your paycheck comes in. Whether you use a budgeting app or your online and mobile banking to track purchases, make sure you keep a close eye on your spending and savings.

If your budget is right, consider setting aside extra income in an emergency fund. A good rule of thumb is to try to build up a three to six month reserve fund in case an emergency arises, such as medical expenses or loss of income.

Set your goals

Set goals for both the short and long term and make sure they are measurable and trackable to keep you on track.

If you want to save for a new car in the next three years, set a budget for the car and work backward to figure out how you can save for the money you need up front. A good way to achieve this is to pay yourself first by having part of your paycheck deposited directly into a savings account that is separate from your checking account used for everyday purchases.

Accounts such as money markets and certificates of deposit (CDs) typically offer higher interest rates than a standard savings account and can be a good place to build your savings, depending on how often you need to access the money.

And don’t forget long-term goals like retirement! Taking advantage of employer-sponsored plans like a 401(k) early in your career can be a good way to work toward retirement, especially if your employer pays a portion of your contributions.

Build credit responsibly

Lending and borrowing will play an important role in achieving your goals if you use them responsibly.

Using a credit card for some of your regular expenses, such as gas and groceries, can be a good way to build your credit payment history, which is just one factor in your credit score. Other ways to build your credit score include keeping your debt ratio below 30% and avoiding opening too many new lines of credit in a short period of time.

With technology making it easier than ever to make a purchase with a tap, click or swipe, it’s important to keep a careful eye on your various accounts and try to pay your balance in full whenever possible to avoid interest accrues.

Many recent graduates also have student loans to pay back, so it’s important to factor these payments into your plan and keep them in mind when deciding whether the purchase you have in mind is a real need or just a want .

Graduation is an exciting time in your life! With the right planning, you can set yourself up for success as you enter this new and exciting phase of your life. If you think you need more help, consider talking to your local banker to help you put a plan in place.

Shelly Kavanagh is senior vice president and director of retail delivery for WSFS Bank. Prior to her current role, Kavanagh served at WSFS as director of retail strategy, regional manager, retail program manager and small business relationship manager. She brings with her more than 16 years of experience in banking.