The 3-Step Financial Checklist Every College Graduate Needs

When it comes to personal finance, the post-college summer is intimidating. After the hype around the release begins to die down, reality sets in. Your newfound financial independence means freedom, but it also means responsibility, not to mention uncertainty. You are in the financial stage somewhere between a checking account and having a 401(k). Some of your friends may be starting new jobs with a six-figure salary, while others are traveling on a minimal budget. So what’s the next stop on your financial journey?

To sort through this tense but encouraging! time, let’s look at three basic steps every new college graduate needs to take right now.

Set up a student loan payment plan

Since you just graduated from high school, you can have a nice six-month grace period before you need to start paying off those student loans. Sit down and find out how much you have in federal loans versus private loans, compare interest rates, and make a plan of action on how best to pay them off.

Start taking steps now to get your repayment plan in order . For loan amounts and providers, go to studentaid.gov . (Note: This is not the same portal you would normally use to pay your student loan, such as through a service agent like Sally Mae.) Once logged in, select “My Help” from the drop-down menu under your name. Your credit service organizations should appear in this section. By clicking on Loan Breakdown, you will see a list of loans you have received, including loans that you have paid off or combined into a new loan.

And if you’re (understandably) tempted to just say “fuck it,” here’s what happens if you don’t pay off your student loans at all .

Create an emergency fund

Even with student debt in mind, you should still prioritize saving. You may not have gotten a stable job with a 401(k) yet. In the meantime, you should focus on building your emergency fund.

A brief overview of exactly what an “emergency fund” is, as opposed to other savings funds: Your emergency fund is a cash reserve set aside for unplanned expenses or financial hardship, such as a job loss, medical emergency, or sudden emergency car or home repairs .

How much should you aim to save? As we said earlier , a typical rule of thumb is to put six months’ worth of living expenses into your emergency fund. This includes expenses such as housing, food, utilities, insurance, transportation, and debt payments. Non-essential expenses such as vacations, entertainment or dining do not count towards your “emergency” bill.

If you haven’t already, make a list of everything you spend money on and consider what non-essential expenses could go into your emergency fund instead.

Create your credit

A good credit history will help you rent your first apartment, get better interest rates, and save thousands of dollars throughout your life.

If you had a student credit card throughout college, contact your card provider and let them know that you are no longer a student. They may allow you to continue using the same card or suggest an upgrade.

And if you graduated from college without a credit card, get a basic one as soon as possible . Remember that while your goal is to go into a little debt to build up your credit history , you should never spend money that you can’t afford to pay off at the end of the month. Read about the basics of improving a low credit score , maintaining a high one , and even building credit without a credit card .

For more information, check out this guide to personal finance for the recent college graduate.