Graduate Don't let money worries stop you from celebrating your accomplishments. Credit: Colourbox

You finished college, you’re hopefully about to make more money than ever before, but there are student loans that must be paid back. How do you manage to do it right? We talked to finance expert Gillian Verga from MoneyStream about her money tips for recent graduates.

What do students about to graduate need to know about academic loans?


The terms of the student loans are going to vary, so it’s up to the student to read the documentation. Most start pretty soon after graduation. It’s important to start paying off a little bit at a time and make that a habit rather than putting it off.

What are the biggest mistakes recent grads make when it comes to money?

This might not be earth-shattering, but one of the biggest things is that they are not starting to save as soon as they get an income. You start working, you’re excited to get an income, so now you can buy things you couldn’t before. You also feel like there’s a long time until retirement, so it’s really tempting to put off saving until you’re older. If your employer offers a 401K, you should absolutely take advantage of that.

What are some money-saving tips for living in an expensive city, like New York?

Think about your finances when you rent your apartment. Make sure you are not renting something that doesn’t give you any leeway in your monthly expenses. When you get your income for the month, it’s a good habit to take out the bills that you have to pay and take out money for your savings first. Then calculate the rest of your spending. Transfer the money to a fund. That is good way to see how much you can actually spend after the bills and savings have been taken care of.

What do young people forget about money today?

Young people today have been raised in a time where there’s a lot of instant gratification. If you want something, you can get it right away. But this generation has also seen the economy go up and down, and it’s really hard to know what the future holds. But if you have something set aside, then you are prepared. If you end up being out of a job for a year or having unexpected health costs, having that money set aside will allow you to get through that successfully. It is important for millennials to think more long-term, because this generation will probably live longer than any generation before.

Is there a certain amount you should set aside for your savings?

The easy answer is as much as you can, but around 10 percent of your income every month would be a great goal to shoot for.

What is the one thing that everyone should know about money?

Watch out for credit card fees. When you are young, you get a lot of credit card offers. You may be able to sign up for a lot of debt, and the banks are happy to let you do that. But if you are carrying a balance on your credit card, you end up paying a lot of money in interest, and you can end up paying late fees. They can eat into your finances, so looking out for those costs and making sure that you are paying bills on time is important for saving money, but it’s also important for keeping a healthy credit score. Your credit score may not seem important to you when you are a college grad, but when you are ready to buy a house you’re going to care that your credit score isn’t good.

What financial documents should you keep on file?

If you work somewhere you can expense things, you want to save those receipts. If you have expenses that will be tax-related you want to save those, and keep a folder someplace where you keep all your tax-related items so you don’t forget about them. If you are looking for work, then any expenses related to your job search you can deduct from your taxes. Let’s say you take someone out for lunch to get their advice about your job search and you are paying for their lunch — you should save that receipt and that can be deducted as part of your job search. Also, if you’re working and there are work-related expenses that your company doesn’t pay for, you can deduct those.

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