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Of course, that’s a lot easier said than done, with unemployment rate around 9% and even higher–a staggering 16%–for African-Americans.
Still, there are many steps recent college graduates can take to put themselves on the road to financial security, including numerous steps that have nothing to do with finding that next work gig. In fact, if you don’t yet have a job, the tips below can help you keep your finances in tip-top shape while you actively pursue employment.
Here are four financial strategies for the Class of 2011:
Avoid Credit Card Pitfalls
Once you leave campus life, it’s important to learn how to juggle a host of new expenses–rent, food, utilities, and more. If you haven’t already landed a job, you might be tempted to rely on credit cards to make end meet. But for your own sake, resist that temptation.
Keep a tighter rein on your budget by using a debit card instead, suggests Jesse Ryan, managing director, Accounting Principals. “If you must use a credit card, shop around for a card with a low interest rate, preferably below the 12% range, and try to pay off the card’s balance in full each month,” Ryan adds.
Check out CardRatings.com as a good place to find the best credit card that fits your situation.
Don’t Ignore Your Student Loans
If you borrowed money to pay for college, you probably had an “exit interview” in which the financial aid staff at your school reminded you that those student loans were just that — loans — and not free money. Still, much of what’s explained in those exit interviews seems to go in one ear and out the other for many students.
But the fact remains, you can’t afford to let your student loans go delinquent–or even worse, fall into default status.
So if you have any trouble whatsoever paying your student loans, or anticipate that you might, reach out immediately to your lender or loan provider. Particularly if you’re not yet employed, find out what options exist, such as getting a loan forbearance or deferment of payments. Even if you’ve defaulted on your student loan, there are steps you can take to get back on track.
Check Your Credit Reports and Credit Scores
When you were in school, the three digits that mattered most were your GPA. Now that you’ve left college, it’s all about your FICO score, a three-digit number that ranges from 300 points to 850 points. Maintaining a good credit rating is important because it’ll help you do everything from renting an apartment to getting cheaper auto insurance rates. Also, having bad credit could hurt your chances of getting a job since the Society for Human Resource Management reports that 60% of all U.S. employers do some form of credit checks when screening job applicants.
Visit AnnualCreditReport.com to get your credit reports free of charge from each of the “Big Three” credit reporting agencies, Equifax, Experian and TransUnion. By law, you’re entitled to get one free report from each credit bureau every 12 months.
You have to buy your credit scores. Get your FICO score for $19.95 at MyFICO.com. Since the VantageScore is growing in popularity, it’s a good idea to check out your VantageScore too. It’s available for $7.95 here from Experian.
Use Graduation Gift Money to Start an Emergency Fund
Many college grads rake in some serious dough from relatives and others who want to help the graduate in the family start off on the right foot after graduation. If you’re lucky enough to collect some big money–or any money at all–as a graduation gift, do the right thing with those funds. Instead of just blowing the money on clothes, electronics or other things that will depreciate over time, stash that money away in an emergency fund so you’ll have a cash cushion for when times get lean.
“This should be used only for times of unemployment, medical emergencies, or a
sudden uninsured car or home repair,” says Bill Hardekopf, CEO of LowCards.com. “The goal should be (to save up) enough for six months of living expenses.”
By using these four strategies, college grads from the class of 2011–including those of you with jobs and those of you still looking for work–will be better prepared to financially transition from campus life to life in the real world.
Lynnette Khalfani-Cox is a weekly money and finance columnist for BlackEnterprise.com and founder of the free financial advice blog, AskTheMoneyCoach.com. Follow her on Twitter @themoneycoach and see her column every week on BlackEnterprise.com.