With graduation season upon us, it seems that just about everywhere I look, I'm reading articles, blog posts, and social media posts about how we are doing a poor job of teaching our graduates, whether they're graduating from high school or college, about day-to-day finances, including credit and budgeting. What a shame, especially when more than two thirds of college students are taking out student loans, and I venture to say most probably have no idea of how they will pay them back. Without a plan, our young people are signing up for decades of debt payments not even knowing if or how they will be able to pay them. So if you are a graduate or parent of a graduate, pay attention; here are a few of my credit tips.
- Educate yourself: As a graduate, it's time to take responsibility for your education from here on out. If you don't think you know enough about handling credit and finances, you need to accept the responsibility to educate yourself. You can start your education today by talking to your parents -- even if you don't want to emulate them financially. Continue your education by reading books and blog posts (like this one) and listening to podcasts.
- Make a plan: Part of being a graduate is knowing what you want, having life and financial goals, and then creating a plan to get there. For instance, would you like to own a home someday? You would? Great, then create a plan so you will have a good credit score and enough saved for the down payment. The same goes for paying for your education. Yes, be wary of too much student-loan debt. Do you know what the payments will be when you get out of school? Do you know about how much you can expect to make at entry level in your profession? These need to be part of your plan.
- Decisions along the way: Decisions now will impact you as you go. That means realizing that everything you do financially and with your credit will affect you for many years. Be cautious with debt, credit cards, car loans, and student loans. It also means reading and understanding everything you are signing up for when you agree to taking out new debt. Think through your decisions and make sure they are consistent with your plans and goals.
- Last but most important: Pull your credit reports for free at www.annualcreditreport.com. You will want to make sure all the information on your credit reports are correct. If you have student loans on the report, make sure you are in contact with them on any new address change. Keep making sure you check your credit reports at least twice a year. You want to be checking them from Experian, Trans Union and Equifax.
Today's the day to begin being the master of your financial goals and educating yourself on credit and finances; then you will have a healthy credit report. Congratulations, and I wish you all the success.
Email me a credit question at JeanneKelly@kgroupconsulting.com.