Your Financial Life After Graduation

To the millions of college and high school seniors who recently graduated (and to their parents, who weathered the ups and downs of reaching that summit): congratulations on a job well done. After the celebration dies down, you'll no doubt be eager to embark on life's next chapter, whether it's finding a job, preparing for college or enrolling in military or community service.

Before you jump in feet first, however, let me share a few financial lessons I learned the hard way when I was just starting out. They might save you a lot of money in the long run and help you get closer to your life goals, whether it's buying a house, starting a family or even retiring early – as far off as that may sound.

First, pretend you're still a starving student. After landing your first full-time job, the urge to go on a spending spree for new clothes, a better apartment and a car from this decade will be irresistible after surviving on ramen noodles for four years. But unless you had generous scholarships or a rich aunt, you're probably already saddled with thousands of dollars in student loan debt.

(Note to entering freshmen: Tread carefully around student loan debt. The Consumer Financial Protection Bureau (CFPB) has a great guide for making informed decisions about paying for college at www.consumerfinance.gov/students.)

After you've factored in rent, car payments, renter's and car insurance, credit card charges, student loan balances and other monthly bills (not to mention payroll taxes such as Social Security tax, which went up 2 percent this year), your new salary probably won't go as far as you'd like, especially if you're trying to save for one of those life events.

That's where a budget can help. Numerous free budgeting tools, including interactive calculators, are available at such sites as the government-sponsored MyMoney.gov (www.mymoney.gov), the National Foundation for Credit Counseling (www.nfcc.org), Mint.com (https://www.mint.com) and Practical Money Skills for Life (www.practicalmoneyskills.com), a free personal financial management program run by Visa Inc.

Next, know the score, credit-wise. Many people don't realize until it's too late that a poor credit score can trash your financial future. After you've missed a few loan payments, bounced some checks or exceeded your credit limits, you'll probably be charged higher loan and credit card interest rates and offered lower credit limits (if not denied credit altogether), unless and until you can raise your credit score. You may even have to pay higher insurance rates and harm your ability to rent an apartment or get a cell phone.

To know where you stand, review your credit reports from each of the three major credit bureaus (Equifax, Experian and TransUnion) to find out whether any negative actions have been reported and to look for errors or possible fraudulent activity on your accounts. You can order one free report per year from each bureau if you order them through www.AnnualCreditReport.com; otherwise you'll pay a small fee.

To learn more about credit reports and scores, visit the CFPB's "Ask CFPB." Another good resource is What's My Score (www.whatsmyscore.org), a financial literacy program for young adults run by Visa, which features a free, downloadable workbook called, "Money 101: A Crash Course in Better Money Management," and other free tools.

You worked hard to graduate. Just make sure you don't sabotage your efforts by starting out on the wrong financial footing.