“I just got a job and have a steady income. What now?”

If there is one thing college doesn’t always prepare us for, it’s how to function in the “real world,” especially when it comes to dealing with finances, like paying bills, investing for the future, and doing taxes. As a finance major, I have a slight advantage when it comes to handling my money, but that doesn’t mean I know how to fully “adult” just yet. If you’re in college or about to graduate, here are five post-college financial goals to set for your 20’s.

1. Take Responsibility for your Own Finances

The sooner you start taking responsibility for your own bills, the better. As you establish financial independence, the money you used to be able to spend on nights out, clothes, and concert tickets will most likely have to be allocated elsewhere.
You’ll need to start taking ownership of expenses like:

  • Health insurance, co-pays for doctor visits, and prescription costs
  • Your cell phone, including the cost of your data and phone plan
  • Car payments, maintenance, fuel costs, and auto insurance
  • Rent, utilities (including internet and cable) and renters insurance
  • Your grocery bill and recurring expenses for necessary household products
  • Any loan payments, like student loans
  • Credit card debt and payments

2. Keep Your Credit in Check

While credit cards may seem like “free money,” you have to remember that you must pay back the amounts you charge eventually. Maintaining a good credit score is important, not just to keep you out of debt, but also to ensure you get better rates on auto and home loans in the future. When your monthly credit card statements arrive, make it a priority to always pay as much as you can and at least the minimum due. As long as you pay off your debt, you can gain points and rewards by using credit cards that you wouldn’t earn with cash.

3. Make a Plan to Pay Back Your Student Loans

Remember those loans you’ve put on the backburner for the past four years? Well, it’s finally time to make plans for repayment. First, find out when you have to start making payments (some lenders give a six month grace period from your graduation date) and calculate your monthly payment based on your chosen repayment plan.

If your loans have fixed interest rates, you might consider a payment plan with a longer payment period. However, if you have adjustable-rate loans, rate fluctuations over time can mean you might end up paying more than originally intended. Also, if your parents cosigned on the loans, make sure you don’t miss any of your loan payments. You don’t want to hurt their credit, along with your own.

4. Plan Out Big Purchases 

You just graduated college and got a job, so you finally have some extra money to spend on yourself. Let’s say you want to a buy a new car. Don’t just run to the dealership the second that direct deposit hits – plan it out. What kind of car do you want? How much is it going to cost? Take advantage of online resources like Kelley Blue Book to compare options.

You’ll want to start by putting money aside for a down payment and making sure you can afford the monthly car payment comfortably among all of your other monthly expenses. Yes, you pay these expenses once a month, but try looking at it from a yearly perspective too. A $400 monthly car payment is $4,800 a year. Also, if you have any other big expenses coming up in the near future (like a big vacation or move), you will want to take those costs into consideration before adding to your debt.

5. Start Investing 

First and foremost, you’ll want to start investing in your company’s 401(k) or retirement account as soon as you are able. Find out if your company matches your contributions, and by how much, because those matches can be a significant help in your retirement savings. For example, if you contribute $1,000 a year, and your company matches 50%, then you’ll actually have $1,500 in your account at the end of the year. That’s an instant 50% return on your money!

If you want to take it a step further, you can open a separate investment account. This is most likely the only time in your life when you’re going to have all of your paychecks to yourself, so why not start investing a little of each check for the future? Even if you only invest $50 a month ($600 per year) into an aggressive portfolio, it can add up quickly. Waiting just five years, you’ll have to contribute $75 a month ($900 a year) to end up in the same place long term.

Short term, you’ll have a little extra money for a rainy day (or paying off those student loans).

Medium term, you’ll have some savings set aside for a wedding, buying a house, and having kids.

Long term, you’ll have an extra $25k stashed away in combination with your 401(k).

Once you have more money to contribute down the road, you can start looking into finding a financial advisor to actively manage your portfolio.

Have more questions?

Check out our retirement tools and calculatorsInvestopedia also has a lot of helpful resources to learn more about investing.