6 financial traps new college graduates should avoid
LACONIA – As college students across the nation graduate and start their careers, financial responsibility should be a top priority. Bank of New Hampshire has identified six traps that could hinder new college graduates from securing their financial future.
Not having a budget
Simply put, don’t spend more than you make. Calculate the amount of money you’re taking home after taxes, then figure out how much money you can afford to spend each month while contributing to your savings. Be sure to factor in recurring expenses such as student loans, monthly rent, utilities, groceries, transportation expenses and car loans.
No emergency fund
Make it a priority to set aside the equivalent of three to six months’ worth of living expenses. Start putting some money away immediately, no matter how small the amount. A bank savings account is a smart place to stash your cash for a rainy day.
Paying bills late
Each missed payment can hurt your credit history for up to seven years and affect your ability to get loans, the interest rates you pay on loans, and your ability to get a job or rent an apartment.
Consider setting up automatic payments for regular expenses like student loans, car payments and phone bills.
Racking up debt
Understand the responsibilities and benefits of credit. Shop around for a card that best suits your needs, and spend only what you can afford to pay back. It’s a great tool if you use it responsibly.
Not thinking ahead
It may seem odd since you’re just beginning your career, but now is the best time to start planning for your retirement. Contribute to your employer’s 401(k) or similar account, especially if there is a company match.
Ignoring bank help
Most banks offer online, mobile and text banking tools to manage your account night and day. Use these tools to check balances, pay bills, deposit checks, monitor transaction history and track budgets.
For more information about Bank of New Hampshire, call 1-800-832-0912 or visit www.BankNH.com.