From paying off your student loans to establishing a good credit history, it’s important to establish good money behaviors early. New grads, here are ways to get started with money management.

Finding steady employment may be your priority as a new college grad, but establishing a solid financial foundation is equally important.

As you embark on your post-college life, remember these eight financial steps may help to build good money habits.

1. Check Your Annual Credit Report

Your credit score is a big deal: The information in your credit report could determine whether a landlord approves your rental application, an employer offers you a job, or a bank approves your car loan.

Access a free copy of your credit report once a year at AnnualCreditReport.com. Confirm that:

  • You recognize the accounts. The Identity Theft Resource Center’s data indicates new account fraud is a growing trend in the wake of retail, government agency, and technology data breaches that have taken place in recent years.
  • The information is accurate. Most credit report disputes can be initiated online or by phone in a matter of minutes, but it’s up to you to report inaccuracies and provide supporting documentation so the credit bureau can investigate.
  • You’re aware of all your debt. The loans and credit card accounts under your name are listed on your credit report, along with balances owed, payment history, and contact information for the credit issuer. Make a list of the accounts, balances, and amounts due so you can include the payments in your new Grownup budget. If you recently moved off campus or to a new apartment, confirm you’ve updated your address with all creditors, too.

2. Create a Budget

Budgeting may seem futile when you’re a college grad with student loan debt, but don’t get discouraged. Having a budget ensures you’re equipped to meet your current financial obligations, while reducing the anxiety that comes with living paycheck to paycheck.

There’s no shortage of budgeting apps or recommended approaches for how to create a budget, but most involve these basics:

  • Your monthly take-home pay, subtracting your fixed monthly living costs—shelter, utilities, credit cards, student loans, insurance, car loans, and variable costs for expenses like food and transportation
  • Your amount left over to put toward discretionary spending—gym memberships, travel, entertainment, savings, and retirement contributions.

3. Run the Numbers Before You Sign a Lease

According to The Harvard Joint Center for Housing Studies, one out of four renters is “severely cost burdened”—meaning their monthly rent is at least half of their take-home pay. Cost-burdened Grownups may not be able to afford necessities, and are more likely to get stuck in debt. Returning to your childhood bedroom as a college grad or sharing your first Grownup apartment with several roommates may not be your ideal set up, but doing so could be a smart financial decision.

4. Open a Bank Account

Set up checking and savings accounts that offer free direct deposit, online bill payments, mobile check deposits, automatic transfers to other accounts, and overdraft protection. Ideally, your bank won’t charge fees for ATM use or require a minimum balance.

5. Establish Automatic Payments

Regular on-time payments are important in building and maintaining a good credit score, and any missed or late payments can result in penalties, fees, and a lower credit score. Establish recurring monthly payments for bills that are the same amount each month (like rent, car payment, or health insurance premiums). Use online bill payments for utility bills and similar expenses so you don’t have to remember to mail a payment (and risk missing the due date).

6. Sign up for a Retirement Account

It literally pays to start early: Planning your exit from the working world while you’re just getting started may not sound good for professional morale, but the money you invest early and consistently has the best opportunity for growth, thanks to the power of compounding interest.

If your employer offers a 401k or 403b plan, enroll as soon as you’re eligible and contribute at least 1 percent of your pre-tax income to it; increase the contribution by at least one percentage point each year until you reach the maximum allowed. If your employer offers to match up to a certain percentage, contribute at least that amount. Otherwise, you’re missing out on free money.

If your employer doesn’t have a retirement plan, or you haven’t found steady employment but do earn compensation (which the Internal Revenue Service defines as wages, commissions, self-employment income, nontaxable combat pay, or alimony), open a traditional individual retirement account (IRA), or a Roth IRA. Contributions to either of these retirement accounts may lower your taxable income, which could mean you owe less federal income tax.

7. Create an Emergency Fund

An emergency fund gives you a safety net when unexpected financial emergencies happen, so you don’t have to rely on a high-interest rate credit card you may not be able to pay off quickly. Set up an automatic transfer to contribute a little money from every paycheck into a savings account specifically for emergencies—that way, you won’t procrastinate saving or be tempted to spend the cash.

8. Use Credit Cards Responsibly

If you’ve never had a credit card, consider getting a secured credit card to start building your credit history. You may need to deposit at least a few hundred dollars to secure the credit line, but you’ll get your money back once you prove you can manage credit responsibly and graduate into an unsecured card.

This photo shows freelance writer Stephanie Taylor Christensen

Stephanie Taylor Christensen is a former financial services marketer turned freelance writer who covers personal finance, career, health, and small business news. She is the owner of Om for Mom prenatal yoga in Columbus, Ohio. Connect with her on Twitter.

Any third-party resources or websites referenced above are not under our control. We cannot guarantee and are not responsible for the accuracy of the resources, websites, or any products or services available through such resources or websites.While we hope the information in these materials are useful, it’s only intended to provide general education. It’s not legal, tax, or investment advice, and may not apply or be useful to your specific financial situation. If you need advice geared to your personal financial situation, you are encouraged to schedule time with a financial planner.

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