SAVE SMARTLY Even if they’re paying off debt, Alex Rezzo, a certified financial planner and the founder of Andante Financial in the Los Angeles area, urges new grads to start saving for retirement right away. “There will always be a more immediate excuse to delay saving for retirement,” he says, but he urges people to find a way to save at least 1% of each paycheck and to increase that amount over time. He also suggests parking your direct-deposited paycheck funds in an online bank that offers a competitive high-yield account and is backed by the Federal Deposit Insurance Corp. That way, the money likely will earn more than it would sitting in a traditional bank’s checking or savings account. PROTECT YOUR CREDIT As you build your independent financial life, making at least the minimum payments on your student loan and credit card accounts can help protect your credit. Missing a payment, Lowry says, could damage your credit score. She suggests focusing on paying down any high-interest debt first to reduce the total amount going to interest. Lowry also suggests freezing or locking your credit, which makes it much harder for identity thieves to apply for new credit in your name. Just remember that if you freeze your credit, you’ll also have to thaw it if you want to apply for credit yourself, she says, adding, “you might want to wait until you’re through a period of time when you’re applying for new accounts.” MAKE MISTAKES AND LEARN FROM THEM Kennedy Reynolds, chief education officer at Acorns, a financial services company, says mistakes are part of the learning process, whether it’s overspending or accruing credit card debt, but the key is to learn from the experience. “If you have debt to pay down, take that paycheck and split it up” toward those bills until they are paid off, she says. “Try to picture yourself later and know that the choices you’re making now will have a long-term impact,” she adds.
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