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It can be stressful to think about life after graduation. There’s so much uncertainty: Will I be able to get a job? What if I’m never able to achieve financial independence? Am I going to be buried by my student loan debt forever?

Once you’re out in the “real world,” you’ll likely have to start making a lot of seemingly complicated decisions that can affect your entire life. No longer is financial planning synonymous with checking your bank account app before ordering another drink or knowing the price of ramen off the top of your head.

Take a deep breath and try to relax. While it may sound scary, it’s not nearly as complicated as you think, and improving your financial literacy now will help make the transition a little smoother.

Here’s your no-stress guide to what you’ll need to know money-wise once you graduate college and become a so-called “real” adult:

Start Thinking Long-Term

It may feel premature to be thinking about your financial future, but once you’re out of college, you’re no longer thinking just a semester or two ahead. You’ve got your whole life to plan for. The greatest thing you can do for your financial health is to start thinking in the long-term.

The reason for this is that building a strong financial profile takes time, and while many of life’s great milestones – such as buying a home, planning your dream wedding or having a comfortable retirement – may still feel far off to you, they can often come with big price tags.

A lot of young adults get down about the economy and assume that many of the big financial goals of their parents’ generation are simply out of reach for them. Though we might not be enjoying the economic prosperity of the 90s, those goals – owning a home, retiring early or even just not having to live paycheck to paycheck – are still attainable for many people. Having a plan can help you get there.

The best way to start is to start early. Don’t assume there will be a better time in the future for you to start managing your money with your long-term finances in mind. It’s easy to think that you have plenty of time, but even something as little as forgoing contributing to a 401(k) during your 20s can have you missing out on serious cash.

Start Building Credit as Soon as Possible

Yes, you do need credit. While it might feel like the prudent choice to skip out on having a credit card, if you plan on ever buying a house or taking out a loan, you’ll need a solid credit rating. Even if you don’t plan on doing those things, it’s still a good bet to start building credit. Your score can affect the rates you pay for car insurance, and potential employers sometimes do credit checks before hiring.

Credit scores range from 300 to 850, and anything above 670 is considered good.

The best route for newly minted adults to take is to apply for a secured credit card. A secured card requires a deposit (usually of around $200) to be used as collateral, and it’s a great way to start building a strong credit history.

With the secured card, you should only make a couple of small purchases every month equal to no more than about 30% of your limit. Only buy things that you know you’ll be able to pay back when the bill comes. And make sure to pay your bill in full, as secured cards often have higher interest rates than unsecured cards.

Make sure to do your research before applying for a card. NerdWallet has a useful tool for finding the best card for your needs, even if you have no credit.

Think About Your Goals and How You Want to Pay for Them

Already planned out your dream wedding? Hope to open your own business one day? Want to retire early? Once you graduate college, many of the things you pictured about your life in the abstract suddenly become a real possibility, but it’s likely up to you to plan for the things you want.

Don’t just assume that you’ll one day happen upon the money you need to achieve your goals. It’s surprisingly easy to fall into the trap of letting your financial strategy rely on the hope that a big promotion, the winning lottery ticket or a wealthy spouse will come your way and solve your problems. While that might work out for a few people, it’s a much safer strategy to actually look at the numbers and figure out how you’re going to afford your goals based on your current financial situation.

Do some research and figure out how much the things you want are going to cost and when you’d like to have them by, and work backward to find out how much you’ll need to save per month. Not only will this help you have a plan in place once you have a steady income to start putting into savings, it’ll force you to take a realistic look at the cost and allow you to adjust your expectations so you don’t end up disillusioned and disappointed when it ends up taking longer than you wanted to save up for that fancy new car.

Begin Saving for Retirement on Day One of Your First Job

It’s oft-repeated advice, but for good reason: If you start putting away money for retirement as soon as you start working, you’ll never miss it and you’ll have a nice little nest egg waiting for you when you leave the workforce. It’s much easier to opt in to a 401(k) program and have a portion of your paycheck go to your retirement fund right away rather than trying to carve out money from your budget later on when you’re used to the extra income.

If that’s not motivation enough, consider this: Younger millennials (those born in the late 1990s) may need as much as $2.5 million in retirement funds to be able to maintain their standard of living, according to USA Today.

If that number sufficiently scared you, fear not – time is on your side. Putting just 10% of your gross earnings into a 401(k) in your 20s could help immensely toward having a comfortable retirement.

Additionally, there are plenty of retirement calculators online that can help you figure out what you should be saving to be on track for your golden years.

Assess Your Financial Situation

Take an honest look at where you are financially. Do you have student loans that will need to be paid once you graduate? Think about how you’re going to afford your monthly payments or if you’ll need to look into refinancing. Do you expect to have a job lined up right after college, or will you need to move back in with mom and dad while you job hunt? Figure out what your living costs are going to look like.

Do some math to figure out what methods are going to work best for you in both the long term and when you’re just starting out. For some people, it makes the most sense to put all their resources toward quickly paying off student loans. Others may find it more economical in the long term to make the minimum monthly payment while putting extra cash into investing; in fact, you could end up with a lot more money in the long run by taking this route. There’s no hard and fast rule for this, so even though it may be annoying and tedious, breaking out your calculator and figuring out the numbers is going to help point you in the right direction.

Learn the Stock Market

This may seem daunting and even counterintuitive to a young person entering the workforce. You have a lot of other, more pressing problems. Why spend any extra cash that could go toward more important expenses on something as risky as investing? Millennials seem to have a particular aversion to investing, and for good reason: Many of them saw their parents lose jobs during the financial crisis of the 2000s and are averse to financial risk as a result.

The good news is that investing in the stock market is actually a really great way to plan for your future, and there are plenty of ways to minimize risk.

If you’re worried about the risk of investing, know that your age makes you better positioned to absorb it. Since you have so much time to build up your investment portfolio, a few inevitable dips in the market aren’t likely to hurt you in the long term.

Asset allocation is how you strategize your portfolio to cater to your personal goals and risk tolerance. Diversifying your investments – meaning having your money in a variety of different areas so that if one area takes a hit, it won’t hurt your entire portfolio – will help you minimize the risks of investing if you want to be a cautious investor.

You can start investing with as little as $5. The app Acorns even allows you to round up everyday purchases and invests the spare change for you.

Once you have a little bit of money saved up, you can invest a couple hundred dollars to really get going.

Saving When You Have Nothing to Save

It can feel a little patronizing to be told that all you need to do to build wealth is start saving. Saving what? I’m lucky if I make rent!

Many of us feel pretty stuck with our finances. With rising living costs, stagnated wages and an increasing number of expenses, it can be hard to find room in the budget for anything long-term.

And it’s not all due to limited resources. It also has to do with limited knowledge. Financial literacy isn’t generally something that’s taught in schools, so most people enter the working world are woefully ill-equipped when it comes to budgeting and long-term financial planning.

If you don’t already know a ton about budgeting, learning about it is a good first step. Here are some pointers, like using the 50/20/30 rule:

  • 50% of your income goes toward the essentials, such as housing costs and groceries.
  • 20% goes toward your long-term financial health. You’ll put this money into a savings account or use it to pay off your loans.
  • 30% is for you – the things that make your life easier and more enjoyable, like concert tickets or your cell phone’s unlimited data plan. This category can also be used to cover unexpected spillover from your “essentials” bucket, like when you need to take your car to the mechanic.

The 50/20/30 rule isn’t one-size-fits-all, so make sure to cater it to your specific financial situation.

Looked at your budget and still having trouble finding any wiggle room? Think smaller. Remember, we’re thinking in the long term, and every little bit will add up. Commit to saving just a dollar or two per day. Set up an automatic transfer so a little bit of money from every paycheck goes into a savings account – even if it’s just $10 or $20. If you end up having extra money after all your expenses, you’re much more likely to spend it if it’s just sitting in your checking account.

Weigh Buying vs. Renting

You’ve heard it many times, in seemingly thousands of articles from every outlet imaginable. It’s become such an oft-repeated refrain that it’s now met with sarcasm and eye-rolling: “Why aren’t millennials buying homes?”

It is true: Young adults are purchasing real estate at much lower rates than previous generations. And that’s not necessarily a bad thing.

Owning a home can be an asset to your financial profile – as long as it makes sense for your lifestyle and your financial situation. When you own a home, you make mortgage payments that eventually come back to you in the form of owned property. And because that property is likely to appreciate over time, it’s generally considered to be a good investment.

With renting, once you slip that monthly check under your landlord’s door, you’re never going to see it again.

However, you’re likely to have more expenses with a home. When you rent and your toilet starts doing that weird thing again, you can put in a simple service request and a handyman will come and fix the problem for you at no cost. But anytime something is malfunctioning in your home, it’s 100% your responsibility, and ignoring problems can become costly.

A lot of people today are less likely to stay in one town their whole lives and need the flexibility to be able to move semi-frequently, renting might be a better option. And while rent can be costly in some areas, scraping together a payment every month may be more financially feasible than coming up with a large down payment on a house.

But for many, depending on what state you live in, a monthly mortgage payment may be cheaper than renting.

It all comes down to what is best for your circumstances. When you’re just starting off, it’s likely that renting will make the most sense for you. But it’s good to know the pros and cons of all your housing options so that you’re able to make an informed decision when the time to consider homeownership comes.

What to Do When It’s Truly Dire

Life is unpredictable. Whether it’s unemployment, a natural disaster, or an unexpected illness, it’s essential that you’re aware of all the ways things can go wrong and how to deal with life’s hardest moments. Having a plan in place will help relieve some of the stress and help you avoid making panicked, rash decisions.

In planning ahead, start an emergency savings fund. Experts recommend having about six months of living expenses saved up. Put the money in a stable account that you can easily access without penalties.

When you’re going through a financial emergency, figure out what payments you absolutely need to make, and stop the ones you don’t. Getting locked out of your Netflix account isn’t a big deal when you’re facing something like bankruptcy. It’s generally recommended that you prioritize payments with the highest interest rates.

If you can, avoid using loans or credit cards to cover costs. The last thing you want is to exacerbate your situation by piling debt on top of it. It’s not ideal, but if you have a retirement fund you may be able to borrow from that if you’re truly in need of cash. Check the rules of your plan first to make sure you won’t be hit with any major penalties.

Don’t be afraid to ask for help. If you’re in a lot of credit card debt, reach out and see what your credit card company can do for you – they might be able to lower your interest rate. Call your electric company and ask if they can help make your payments more affordable while you’re going through a hardship. People will very often be sympathetic to your situation; after all, it’s better for them when you can make your payments.

Depending on your situation, you may qualify for certain types of government assistance. Do your research and look into what kind of programs are available, and remember, there’s no shame in asking for help when you need it.

Entering the “real world” may seem like this huge transition with impossibly high stakes, but don’t let it get you down. It’s like every other big transition you’ve gone through in your life: You’ll be scared at first, and you’ll make mistakes. But you’ll find your way. Nobody learns all this stuff overnight, but by having a general idea of what situations could pop up, you’re already way ahead of the game.

Still scared of your impending adulthood? Been there, done that, and have some advice of your own to share? Let us know in the comments!

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