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5 Things to Do Before You Start Working

If you’re graduated in May (congrats!), I recommend reading David Griner’s post about five things he’d do if he were graduating in May [3]. They contain five solid tips that can help you in your career.

If you haven’t yet joined the workforce but are planning to in the next few months, I wanted to give you five things you should do before you start working.

Learn to Budget

While you were in college, not budgeting was kind of OK. You didn’t earn a lot, you hopefully didn’t spend a lot, and so not having a budget was not as big of a deal. Now that you’ll be pulling in a larger paycheck and will likely be spending more money, it’s important that you learn how to budget [4].

Get A Credit Card

If you didn’t have a credit card in college, now might be a good time to start. Your credit history and credit score will be used in a whole host of unexpected places and will become more and more important as you get older. You probably won’t buy a house with cash, so your score and history will be important in determining your mortgage interest rate. The easiest way to build your credit history [5] is with unsecured credit cards. It’s the easiest way to build credit, not the only way, but the easiest way.

Get A Credit Union Account

Credit unions are wonderful institutions. They are like banks but the “owners” are the credit union members themselves. This means that you’ll usually get higher interest rates on your savings accounts and lower interest rates on loans. Joining a credit union can also be very educational, many of them hold seminars teaching you basic financial ideas that can save you money down the road.

Understand Investing Basics

It’s important that you understand the basic concepts involved in investing, especially retirement investing [6]. You probably won’t be investing directly in individual stocks on the stock market but you should be participating in your employer’s retirement programs, such as the 401(k). You’ll also probably want to open a Roth IRA if you’re eligible. Time is on your side and it’s important you arm yourself with knowledge so you can take advantage of your youth.

Read Foundation Posts

I’ve written several Foundation posts [7] designed to explain the most basic personal finance concepts as comprehensively as possible. The How to Budget article linked to in the first tip is an example of one, as is the retirement investing article. We all need to start somewhere and I felt the Foundation series was a great way to explain personal finance for novices. If you have a topic you would like to see me cover, please let me know [8].

Those are my five, what things do you think new graduates should know as they enter the real world?

(Photo: wwworks [9])