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Money lessons every college grad should know


Katie Ross 
Community Education and Marketing Manager
American Consumer Credit Counseling


Thousands of students graduate from college every year. According to the National Conference of State Legislatures, on average they will graduate with $26,500 in student loan debt. Student loans are the second biggest source of personal debt, trailing only home mortgages, with the entire population accumulating more than $1 trillion. 

Students and graduates need to be financially savvy so that their debt doesn't impact them for the rest of their lives. Student debt can affect a young person’s decision on many major milestones in life, including marriage, having children, purchasing a home, and buying a car. In a report from the Consumer Financial Protection Bureau, student debt is one of the main reasons that 20- and 30-somethings are living a prolonged adolescence, including living with their parents, failing to contribute to retirement accounts and postponing big consumer purchases such as cars. 

Here are the top money lessons that every college grad should know. 

Graduation cap and piggy bank


  • pay down debt while you’re young
  • protect your credit profile
  • save for retirement
  • stick to the “starving college student budget”
  • create an emergency fund



  • overlook cost saving measures
  • use credit cards for non-essential purchases
  • skip on health insurance
  • downplay refusal of credit
  • forget to ask for advice and guidance 



Do pay down debt while you’re young 

Even though student loan debt is often considered “good debt,” it is important to begin paying it down as soon as you possibly can. While it may seem tempting to defer your loans or pay the absolute minimum, it will not help you in the long run. In addition, student loans are one of the best ways to establish and build your credit worthiness. So, when it does come time to purchase that vehicle or home you’ve been saving for, you have the score to do it. 

Do protect your credit profile 

Your credit score allows lenders to measure your ability to handle your money and repay your debts, which in turn determines the interest rates you pay for your car, mortgage, credit cards and even rent. Building up a good credit score through smart tactics such as paying the full balance of your credit card and other bills on time each month will save you thousands in interest payments over the long-run. 

Do save for retirement 

If the company you are working for offers an employee-sponsored 401(k) plan, you should invest in it as soon as possible. These plans let you purchase stocks, bonds, and mutual funds - all with pre-tax dollars. Letting money in a retirement fund compound for decades without having to pay any taxes on it is of a great benefit to you. No saving for retirement is one of the most common and worst mistakes any young American can make. 

If your company doesn’t offer a 401(k), you can open an individual IRA or Roth IRA. myRA is also an option, which is a new retirement savings account for Americans who don’t have an employer-sponsored retirement plan. The myRA plan allows workers to have a portion of their paycheck directly deposited into their account automatically every payday. 

Do stick to the “starving college student budget” 

Once you graduate college, find a job, and receive your first paycheck, it can be tempting to splurge on things you missed out on in college. However tempting it may be, it is important to stick to the same budget you had before you started your job. Balancing your income and monthly expenses is of the utmost importance to ensuring your financial health. Simply put - Live within your means. Always. 

Do create an emergency fund 

For many recent graduates, living paycheck-to-paycheck is a common. Even though setting aside some money for an emergency fund may sound unrealistic, saving just five dollars a week can help if something unexpected happens, like a job loss, medical bill, or car repair. Then, after you start making more money, set aside 10 to 15 percent of every paycheck. 


Do not overlook cost saving measures 

Many college graduates are moving back in with their parents to help them save money and pay down their debt quicker than they would if they lived on their own. If your parents are OK with this, it can be a worthwhile, temporary solution to help you financially in the long run. Perhaps you can even save enough to buy a house when you decide to move out.


Do not use credit cards for non-essential purchases 

Racking up credit card debt on non-essential purchases is one of the worst financial decisions you can ever make. Using your credit card casually for night’s out with friends or small purchases here and there will add up quickly, and so will your payments. Long-term revolving debt can prevent you from taking that dream job you have always wanted that doesn’t come with a large salary. In addition, many employers are running credit checks on applicants, so a bad credit report could prevent you from getting a job altogether. 

Bottom line: don’t dig yourself a hole while you’re young by making frivolous purchases. 

Do not skip on health insurance 

Even though you are young and healthy now, doesn’t mean that you won’t have an accident playing in the backyard, or get sick and have to go to the hospital. Medical bills are one of the leading causes of bankruptcy in the United States. Why would you chance it? Purchasing health insurance will help protect you in case anything happens, and help prevent you from getting disease. If you are under 26, see if you can remain on your parent’s health plan. 

Do not downplay refusal of credit 

If you are refused credit when applying for a loan, take it as a red flag that you are on the verge of a personal financial emergency. Low credit scores signal to companies that you are a high-risk lender - don’t ignore this. If this is you, it is time to be honest with yourself, start paying off your debt, and get your financial situation back on track. 

Do not forget to ask for advice and guidance 

Though you may have spent the last four years obtaining an education, I can assure you when it comes to money and personal finance, the real world is now your classroom, so don’t forget to ask your parents or friends that have real life experiences for advice. What is a good interest rate for a car? How do I check my credit? What is a 401K? These are all questions that you’ll be wondering upon graduation and asking for help is a part of the learning process. 



Graduation is a time to celebrate your achievement over the past four years and the transition to another phase of your adult life. Take the time to educate yourself now on the basics of personal finance and it will pay off ten-fold throughout the rest of your life.

American Consumer Credit Counseling (ACCC) offers non-profit credit counseling and debt relief programs for consumers nationwide who find themselves drowning in debt and wondering "How do I get out of debt?" Our certified credit counselors have helped thousands of individuals and families learn how to reduce credit card debt and get out of debt through a variety of credit reduction strategies. Our credit card debt consolidation and debt management plans help achieve credit card relief by consolidating credit cards payments to pay credit card debt down more quickly. We also offer bankruptcy counseling, housing counseling and other financial education services.

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