Welcome!  The caps and gown are gone.  You've framed the diploma.  Now it's time to make smart choices about your financial life.  In a way, it's easier now than it will ever be because you're used to living on limited funds.  So take advantage of that and read on to learn how to manage your student loans and take full advantage of your employer's benefits.  

 
-Jennifer Lane, CFP

Student Loans

While they may seem overwhelming, student loans are a fact of life for the majority of college grads.  If you take the time to plan, you minimize any anxiety you have about paying them back.  

• Student loans become payable 6 months after you graduate.
• Most payback plans are for 10 years.  Make your best effort to pay back the loan within that time period so you're far along when you add a mortgage and family to your expenses.  
• Consolidating your loans makes the monthly process of paying them easier but check the interest rates first.  Unlike a mortgage, which can be refinanced if interest rates change, you can only consolidate once.  It might make sense to leave your loans separate or to consolidate the higher interest loans while leaving lower interest loans as they are.  The Federal Student Aid website from the Department of Education can walk you through the decision making process.  
• If money is tight, you can look into graduated loan payments, which begin with smaller payments and then increase as you move through the payback period.
• To put yourself in the best position to when you start your loan payments, calculate your loan amount.  Then create a budget now that includes that amount -- with maybe a little extra if you can swing it.
• If you have the cash, you can also pay the interest on the loan in the interim 6 months.  

Employer Benefits at Your New Job

It's an exciting time -- a new job, disposable income, and the future ahead.  Employers often have great benefit packages -- make sure you take advantage of all they have to offer.    

• You need to protect your income so buy disability insurance if it's available.  Yes, you're young and healthy, but better to be prepared.
• Next you need to protect your future.  Use your employer's 401(k) or 403(b) plan.  Who knows what Social Security will be like when you retire.   
• If your employer matches contributions, invest at least the minimum amount to get the match.  It's free money!  Because of the power of compounding, keeping your expenses down to put more into your retirement account early will reap great rewards later on.
• Roth IRAs - if your employer offers one within the 401(k), then invest in that first.  If not, then start your own.  Being able to withdraw money tax free in retirement is a big bonus.
• If you have co-signed loans or debt, then you need life insurance.  If your employer offers that -- usually one to one and a half times your salary -- buy it.
• Check to see whether there are legal benefits.  This is a relatively new benefit where you pay a little bit each month for access to legal resources.  You should make a will (see Who Gets Your Stuff) and create a healthcare proxy and power of attorney.