save money after graduation

The Perfect Guide on How to Save Money after Graduation


Graduating high-school is no less than achieving a milestone in a student’s life. Every student wishes to pass out successfully only to enter a new world- the professional world. However, the professional world calls for retirement which demands proper planning which requires adequate skills to save money after graduation. The moment a student graduates and steps into the corporate world, the retirement planning should begin.

Interestingly, the only thing that prevents people from saving and planning for retirement is that they think it’s too early for it. In reality, there’s no such thing as, ‘it’s too soon for saving.’ Every passing day is another chance to prepare for the financial future. Sadly, young adults often prioritize earning more than saving, which is pretty normal, but not the wisest choice. According to LendEDU, almost 58% of students do not save money every month.

Many young graduates, due to the lack of financial education, have high expectations after graduation, but fail to achieve any sort of financial security. A survey conducted in 2016 by Dave Rathmanner stated that only 14% of students had received adequate finance education in high school.

Therefore, this guide is here to enlighten the young graduates on the importance of planning for retirement and different ways to accomplish it.

Retirement planning: Why is it significant?

The only thing working in favor of young graduates is time. So, the number one reason to plan for retirement is to make productive use of this gift. Often the word, ‘retirement’ stimulates a negative vibe.

It frightens people as it makes them feel old and dependent, so nobody wants to converse about it. But, what is so scary about retirement? It’s the lack of planning for the future.

Graduating from college is an accomplishment of level one, while level two awaits. Beginning a professional life excites every graduate as they expect to see new horizons and fulfill their dreams, however, without any plans for the future. This is where financial planning comes into the picture.

Financial or retirement planning simply means to save. Do a favor and start saving now. It’s vital in so many ways.

  • By investing in projects that yield regular income, retirement planning may allow the student to live a worry-free and peaceful life where stress is not welcomed. Retirement age is the age where one should feel relaxed and obtain the benefits of all the hard work done half of their life.
  • Nobody can work forever. So, why not begin saving now and enjoy the luxuries of life later. Life is a matter of striving to bring the A-game in every field, academically or professionally just to earn and achieve desired dreams.  But, retirement age is when that same money the individual worked so hard for should be at their disposal. To achieve this, one should start their investments for a stress-free retirement at a very young age since money takes its own sweet time to grow and accumulate. So, by the time they retire, a tempting balance in their bank accounts shall await them!
  • Medical emergencies are one of the biggest risks of old, retired age. With old age comes various health issues and nobody would want to compromise on their health. Unfortunately, every year medical expenses are seen to rise rapidly thus with a thorough post-retirement plan, good care is guaranteed.

How to save money after graduation?

Now that the significance of retirement planning is well understood, it’s time to share effective ways on how to save money after graduation so higher schoolers can be saved from drowning in stress, worries, and debts!

1 Evaluate the current situation

Before jumping on the bandwagon, take a minute to assess the current financial situation. As soon as students graduate and begin earning, a thorough evaluation of the financial position is vital to establish a plan that can precisely address any shortfalls.

When a person is first interviewed for a job, employers most likely mention their retirement options such as 401k, 403b, or 457 retirement plan. So, begin by exploring the different retirement plans the company sponsors.

Each plan is distinct in its way so discuss the technicalities of each before investing in them. Most organizations offer 401k which is tax-deferred. So, any contribution made into this plan shall yield great tax benefits.

However, different plans offer different benefits so choose the ones that suit the situation.

2 Determine the span of time

The current age and expected retirement age are the building blocks of a successful retirement strategy. The longer the time between the current and the retirement age, the higher risk an investment can withstand.

So, decide the retirement age and then calculate the years of retirement. This shall help in analyzing the retirement expenses which will further aid in ensuring whether the current investments are capable to meet the future expenditure or not.

3 Decide on the asset

Inflation is the biggest threat to any investment. Because it lowers the value of money, the real return from an investment is usually lesser than the expected return. Hence investors have to make sure to invest in assets that generate income higher than the inflation rate.

Young and amateur investors can take the assistance of a financial advisor to decide on the asset type for the investment. Based on research,  investors who took the help of financial advisors experienced an average increase of 1–3% in the value of their portfolios yearly compared to those who didn’t.

4 Diversify the investment

 Once the young graduates familiarize themselves with investing and have sound knowledge of the details, explore the variety of investment options available. Don’t create boundaries.  Pool the resources into different projects.

Consider investing in the stock market, mutual funds, bonds, and more. The market also includes several innovation-based investing services serving a younger, more techno-geek audience.

By diversifying the investments the income streams are diversified. This way students set a safe future for themselves.

However, before investing, assess the risk tolerance- which simply means how comfortable the person is with fluctuating investments?

It’s necessary to know whether risky, yet higher return investments trigger sleepless nights for an individual or they feel satisfied.

To all the new investors, this market is filled with uncertainties so mental preparation is recommended.

5 Enjoy the benefits later

The majority of the young people are weak savers and start using the money set aside for retirement. This is the simplest method but can cost  heavily if not done right.

Investors should abstain from using retirement savings for any purpose, and reap the benefits later for their intended purpose.

Apart from this, young investors can plan out their life goals and assign a specific amount for them every month. This way, each financial goal will have its accumulated fund.


Hopefully, this guide was detailed enough to help the students understand the importance of saving as well as how to save money after graduation. It’ll be great to see the young graduates prioritizing saving when they start earning because according to Investopedia, 64% of Americans save less than $10,000 for retirement. Don’t be among those unfortunate ones. Build the finances. Build the future.

Then, sit back and relax on the hammock in the lawn with a glass of Margarita and watch the hard work pay off!

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