The Most Critical Six Months in a College Grad’s Life

Graduating from college is one of life’s most thrilling events. Finishing my degree, walking the aisle and receiving a fancy document in a leather-bound case remains one of the high points of my life.

A diverse group of young adult graduates

Leaving college life behind, I was ready to live life to the fullest, whatever that meant. I was so over living under campus rules, grueling classwork, never-ending papers, mid-terms, and finals. I was ready to begin life in the real world.

Unfortunately, I still had a lot to learn about managing finances. I knew nothing and worse, wasn’t aware that I knew nothing. What was there to know, anyway?

Sadly, I am not alone. Today’s graduates are smart but generally financially ignorant.

For college graduates gearing up to enter the real world, I offer the following for starting off on the right financial foot.

Dear Graduating Class of 2019

The decisions and choices you make in the first six months after graduation have the power to set the course of your life, for good or bad.

Of course, you’ve been a poor starving student long enough. You deserve a new car. And certainly, you need a better apartment. And some decent clothes.

Oh, and who could possibly deny you a European vacation to celebrate this amazing achievement? Followed by a couple of weeks’ vacation to rest and relax. You’ve been through so much.

You reason that things are looking good in the employment department, you’re only young once, it makes sense to do this now before you’re tied down with a job, a home and kids. I could go on, but I’ll stop. And you should too. Stop thinking like that!

Taking on a car loan, the obligation of a lease on an apartment or condo, climbing credit-card balances—all of that may seem innocuous, given the great job you plan to land somewhere, somehow. And that will backfire on you.

Instead of launching you into the real world, it will send you into a downward spiral that collides with unpaid student debt, negatively impacting your life for many years to come.

Stop, drop, and roll

You learned it in elementary school for fire drills. Now apply it to your financial life. If anyone offers you a contract to sign—for a car, an apartment, a credit card or other legal obligation—Stop! Drop the pen and then roll out of there fast.

Keep driving your clunker

Yes, it’s embarrassing. That car you had to drive while in college is a pile of junk. It’s just not you! And those are exactly the kind of thoughts you need to get rid of.

First, you are not what you drive. Your car is simply a means to get from here to there. Keep it. Love it. Be grateful.

Move home

Whatever it takes, do not create any new debt during these critical six months, and possibly much longer. If that means moving back with family for a while—and they’ll have you—do it.

Take a job, any job

You need cash flow, so take the first job you can get. Then keep looking. Keep your resume out there and follow-up as if your life depends on it.

Perhaps you’ve heard the term “stepping-stone?” There is nothing wrong with this. Keep your eye on the goal of your dream job and get to work reaching it. In no time you’ll stop whining and feeling sorry for yourself.

Make payments

You need to immediately begin paying back your student loans, whether a little or a lot. Do not luxuriate in the six-month grace period. That is not some kind of gift.

Interest is accruing every day (unless you have subsidized loans, which almost no one has these days). That means every day your debt is growing because the interest you owe—but are not paying—is being added to your principal balance.

Next month you will pay interest on that interest, too. Ever heard the word “compounding”? Bingo!

My best advice is to create a payment plan to do it in five years or less. Then just do it. Get it done!


Even though in debt, you need to save money. You cannot continue to live on credit. I am a big fan of any kind of auto pay or autosave.

When you set this up, you eliminate the need to make a decision every payday. “Should I save money this week or go to a movie?” “Should I save this week or get those really cute shoes that are finally on sale?!”

If you have to make that same decision over and over, pretty soon you won’t. You’ll get lazy, you’ll stop saving and just keep spending.

But if you are auto-saving even $25 a week, you’ve eliminated that irritating decision. You’re on autopilot and that’s a nice way to roll.

Soon, you won’t miss the money. It will be out of sight, out of mind. I cannot stress just how important this is. If you master this concept and turn it into a lifelong habit, you will be thousands of miles (and dollars) ahead of your peers.

And in closing …

Finally, please accept my heartfelt congratulations on a job well done. You made it—not to the finish line but to the starting gate!


PREVIOUSLY: How to Give New Life to an Old Eyeglasses Case

 Updated 3-12-19 (originally published 5-25-15)

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6 replies
  1. James Eck says:

    I am sorry but this is TERRIBLE advice. Seriously each suggestion you have is over simplified and honestly stupid.

    Every person (unless they are not mature enough to handle it) should have a credit card to build credit.
    If your income can handle a car loan and your old car has problems a new car is typically safer, less money to maintain, less gas costs, and builds credit as well.
    Again if your income/savings can handle it you should get an apartment that fits in your budget. You no longer are limited to finding work close to your parents and can be an independent adult as any self-respecting graduate should be.
    Sure you should take the first job you get IF you have been applying for months and have not been getting any offers. If you are at all confident in your skills and job outlook you should not. Liking your job/career is very important to your well being. Just taking the first job can lead to having to stay there (even after you get other offers) just so it doesn’t look bad later on. It has also been shown that your first salary at your first job greatly affects the average income later on in life regardless of skills, degrees, and experience. Taking a job 10 to 30 thousand less than what you could have got can lead to 100’s of thousands difference in salary later in life.
    You should really have enough savings before you start making payments. However once you do have a decent saving amount (about 3 months of expenses depending on how risky your situation is) you should STOP saving more and put it all toward the loans until they are paid off or your monthly expenses change. There is no reason to put money into a low interest account instead of paying a high interest loan when you already have emergencies covered.

    • go_ask_alice says:

      I disagree with you on some of your reasoning. First, saving in a low interest account while paying your higher interest loans is actually a good idea. Saving changes your relationship with money which will serve you well in the future. Second, moving from job to job is how you advance financially in your field. There is always wage inequity if you stay at one job too long. I am curious where you are in your career. Companies in the U.S. today are no longer interested in retaining their long term employees. I agree with you that it is important to like your job, but it is counterproductive to become complacent in your early jobs because that will affect your earning power later. Third, while I agree that you should have a credit card, most graduates are easy targets for new credit. The best way to build credit is to pay the loans you already have while saving for your future expenses. A new car comes with a higher interest rate because of a lack of payment history on your credit score. Nothing impacts your credit score for the good more than a history of on time payments! A new car also comes with full coverage insurance. If you are under 25, that will have serious financial repercussions! The point of the article was a short term guide for the first 6 months following graduation.

  2. PattiHath says:

    Great advice Mary! Couldn’t agree more. I’ve even seen HS grads “demand” a nice car from their parents. WHAT?? Our sons had good but ugly cars (as my son called it “a very average Sentra”) through college because living near campus means the car doors will be hit frequently, drunk students are lousy drivers and may hit your car, etc. When our boys graduated, we gave them those cars as their graduation gift (i.e. turned the title over to them). They could sell it they liked. One son lived at home for 2 years as he had to study and pass the teacher certification test. He was able to pay down his loan pretty quickly. You DON”T need credit cards to build your credit – your college loan is helping you build credit. Our youngest son was the main renter on all the house leases through college and beyond – again building his credit score. Spot on Mary!

  3. Luisa says:

    You offer some good advice here, Mary, and much of it still applies to those of us who graduated long ago. Thanks for continuing to inspire.

  4. crabbyoldlady says:

    Interesting telling the grads to ‘move home’. Will the next article be about how to keep your sanity and finances under control when your college graduate moves back home?


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