Grads, don’t make these money mistakes

The national nonprofit credit-counseling agency Take Charge America explains some fiscal flubs young adults should avoid to build a strong financial foundation.

Life after college can overwhelm many graduates, especially if it’s the first time they are handling personal finances outside of a school setting or without the help of family.

“When you’re managing money by yourself for the first time, it’s easy to make mistakes that can derail your financial goals right from the start,” said Michael Sullivan, a personal financial consultant with Take Charge America.

“But taking the time to understand what mistakes to avoid, and why, will set you up to win with money for years to come.”

Sullivan breaks down five money mishaps to avoid:

• Living without a budget. To succeed with money, a budget is a must. Start by tracking your expenses for a month to learn your spending habits. Then, make necessary adjustments to accommodate your habits and goals;

• Not planning for a rainy day. You never know when the unexpected will happen. That’s why the agency recommends saving three to six months of living expenses in an emergency fund. Start with small contributions and increase as your budget allows;

• Opening lots of credit cards. Avoid the temptation to open multiple credit cards you don’t need. One card is enough to build a positive credit history, which plays a role in nearly every life milestone, from buying cars and homes to landing some jobs. Use one card regularly and pay it off in full every month. Avoid fees and interest by not overspending or carrying a balance;

• Putting off retirement savings. Retirement may be a long way off, but that’s to your benefit. The sooner you start saving, the more money you’ll have in retirement. Contribute to your 401(k) or company retirement plan and explore a Roth or Traditional IRA. Save what you can at first, and steadily boost your contributions as your career progresses;

• Neglecting your student loans. As a new grad, you have a six-month grace period before you must start repaying federal student loans. Even with the temporary payment reprieve, you still must select a repayment plan. If you don’t, you’re automatically enrolled in the Standard Plan, which requires fixed payments over 10 years. That may not be the best option depending on your situation. If you’re overwhelmed, contacting an experienced student loan counselor can help.

For more financial tips, visit Take Charge America’s Financial Education Center,, or call 1-866-987-2008.


Michael Sullivan is a personal financial consultant with Take Charge America. Take Charge America, Inc. was founded in 1987, and is a nonprofit agency offering financial education and counseling services including credit counseling, debt management, student-loan counseling, housing counseling and bankruptcy counseling. It has helped more than 2 million consumers nationwide manage their personal finances and debts.

  1. YuCalJoe May 18, 2021 8:46 am Reply

    Well said! There is honor and self respect for working and supporting yourself and family. You can also help those in “need”, and pray for those who are in “want”. When I was about to graduate high school, my football coach who also knew about financial planning told me “I want you to see who is going to take care of you financially in the future.” He then gave me a mirror. So true!

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