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You’re About to Graduate College - Here Are 3 Pieces of Financial Advice You Should Know

May 5, 2020

3 Important Tips
You’re about to graduate from college – congratulations! Now that you’re inching toward this major milestone, you’ll most likely be primarily responsible for future financial investments that your parents may have taken care of before like rent, utilities, travel expenses, and more. Making major financial decisions and commitments can be a big undertaking, especially since it may feel like it’s all happening at once. That’s why we’ve listed our top three pieces of financial advice that you can start thinking about now that you’re getting ready to transition into post-grad life.

Consider future financial investments that you’ll need to start saving for.

Now is the time to start thinking about the things you want out of life, as well as the cost associated with each. This way, you can proactively start to create a budget and come up with a strategic financial plan that works best for you.

Below, we’ve listed a few things you may want in the future, both short-term and long-term, and some costs that you’ll need to consider.

A Car

If you have to commute to your new job, you might want to consider whether or not investing in a car will be of more benefit to you than taking public transportation. Paying for your own car is a great first step to take on your way to financial freedom, but it’s also a major financial investment. According to Kelley Blue Book, the average new car in 2020 costs nearly $39,000 to purchase, so you may want to consider looking for a used car, as the sticker price is typically lower than that of a new car.

When thinking about making this investment, be sure to weigh the pros and cons of buying a new vs. used car before you take that step and commit financially. You should also look into potentially leasing a vehicle that has high miles per gallon to help you save money on gas.

If you’re not 100 percent sure that you’re ready to take this investment on alone, consider looking into PFCU’s personal and vehicle loans to see if this is the right path for you.


Pets can provide companionship, which can be great when you’re living on your own, but they do cost money. It’s estimated that total one-time costs (i.e., adoption cost, startup supplies, a microchip, etc.) for a new dog or cat can range from $1,400 to $1,700, so take this into account when you’re considering whether or not you’re ready to commit. You should also be prepared to spend around $800 to $1,200 on annual expenses like medical exams, food, litter, and more.

Leisure Travel

Once travel restrictions are lifted and it’s safe to move around again, you may want to visit friends in other cities or take a vacation somewhere new. And while traveling can be expensive, it doesn’t have to break the bank. You should try to be as strategic as you can in purchasing airline tickets, making hotel reservations, and how you budget for any shopping you’ll do while there.

If you can’t stay with your friends or you’re going somewhere new, try to use comparison sites like Trivago or Hotels.com so you can compare and select the best deal. Or, you can look into staying at youth hostels if you decide to go abroad; they’re inexpensive, and you’ll meet a lot of young people while you’re there. This can be a great option for you as there are typically “youth” (26 and under) discounts available.

A Wedding (and a Honeymoon)

If you think you want to have a wedding one day, it’s important to start financially preparing for it as soon as you can, because weddings can be expensive – but they don’t have to be! According to the Brides 2018 American Wedding Study, the average wedding cost $44,105 in 2018, but if you plan and budget for your wedding strategically, you can keep costs down without missing out on anything you want for your special day.


According to a survey by NerdWallet, it can cost $20,000 to raise a baby in its first year, and a survey by the Department of Agriculture (USDA) found that raising a child can cost around $233,610 to by the time the baby turns 18. Having a child can be extremely fulfilling personally speaking, but before embarking on that adventure, think about how that will impact you financially. Once you have an idea of the financial investment you’ll need to make to raise a child, you can begin budgeting and planning strategically, because after all, children are expensive, but there are ways to save on baby expenses.

Now that you’ve thought of things you may want out of life, it’s time to think about the things you will need now that you’re out of college.

An Apartment

If it’s possible, you should consider moving back home with your parents for a few months or even years to save some money. If you’re itching to kick-start your independence by moving out right after graduation, or your job necessitates it, consider moving into an apartment with a roommate, as having your own place can come with a hefty bill. According to Rent Café, the average cost of rent for an apartment is $1,650 in Philadelphia, and you should also keep in mind that you will have to pay utilities as well, depending on what is included in your rent.

Once you’ve started thinking about where you want to live now, also consider whether you will want to rent or buy a house one day in the future so that you can start planning and saving now. What you want in the future may be a deciding factor in how much you want to spend now, so give it some thought!


Now that you’re starting to become more and more independent, you’ll need to look into health, dental, home/renters, and car insurance (should you get a car). Luckily, you can stay on your parents’ health and dental insurance until you are 26 years old, but eventually, you will be responsible for these expenses, so when looking for a job, ask the employer about all of the health benefits that might be available to you.

If you rent an apartment or house, you should purchase renters insurance to ensure that you are covered should something happen. In Pennsylvania, the average cost of renters insurance is $165 per year.
You’ll also have to pay for auto insurance to cover any accidents or repairs needed should you get a car. In Pennsylvania, the average cost of auto insurance is $878.18 per year, but your rate depends on your coverage, driving history, and other factors, so you do have some control over the cost. Ultimately, though, it’s best to prepare to spend more rather than less so that you’re covered no matter what. Also, keep in mind that if you purchase a new car, the insurance cost will be higher than that of a used car. When thinking about which insurance policies might be best for you, consider looking into an umbrella policy to streamline your payments.

A Cellphone

When the day you pay your own cellphone bill comes, you should be prepared to consult these tips to save money on your bill. It can sometimes make more sense to stay on the same plan as your parents, as there are typically deals that depend on the number of phone numbers on the plan. If your parents are okay with you staying on their plan, you’ll most likely need to work out a plan to pay them for your share. Or, if you want to separate yourself from their plan, consider cloud-based services that rely on Wi-Fi connection before cellular data, as these services are typically more cost effective.

A Rainy Day Fund to Cover the Unexpected

While this isn’t a tangible item, it’s one of the most important things you’ll need to consider now that you’re becoming financially independent. You should start to build a rainy day fund as soon as you can so that you’re covered should something unexpected happen. Most finance experts recommend that your emergency fund has enough money in it to cover 6 to 12 months of unplanned expenses, as this cushion is meant to keep you afloat should you become unemployed or another emergency arises. However, if you feel that 6 to 12 months is too tall an order, especially since you just graduated, you can start smaller by saving enough to cover 3 to 6 months of expenses.

Open a savings account.

You may have already started to build a regular savings account, but there are many types of savings accounts, so you should ask your credit union or bank to help select the right account for you. Since everyone’s needs are different, PFCU offers a wide variety of savings accounts, so you can select the one that best fits your financial needs and goals in both the long term and the short term. Once you open a savings account, you can stash your extra cash there and let it grow so that you can achieve your long-term financial goals like the ones listed above, in addition to saving for retirement.

Start paying off debt as early as possible.

It can be hard to decide when to use any extra money you may have to build a savings account or to pay off debt (especially if it’s student debt). Consider putting a certain percentage of your paycheck in your savings account each month so that you can chip away at each little by little.

If you want to prioritizing paying off debt, it’s important to decide what makes the most sense for your financial health. Student loan debt is considered “good debt” that builds credit scores if you’re paying on-time every month, and credit card debt in excess is considered “bad debt” as it can hurt your credit score if it gets out of control. Consider reaching out to your credit union to chat through which type of debt you should be prioritizing in order to pay it off before it gets out of hand.

Graduating college is a celebration of independence, and finding your independence can be extremely fulfilling for young adults. By keeping these major and minor financial milestones top of mind as you embark on your post-grad life, you may notice your saving and spending habits shift in a way that will support your goals. And something important you should keep in mind is that we’re all just taking it day by day, so try not to be too overwhelmed!

Erin Ellis

Erin Ellis
Accredited Financial Counselor ®
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