When you’re a few months away from graduating from college, there’s a lot to think about. What kinds of jobs do you plan to apply to? What cities do you think you’d like to live in? How are you going to handle so much change in such a short amount of time?

These are all important questions, and you should be focused on them. But you should also turn attention to your finances. The first few years after college are a great time to set up a plan for your money, which will help you achieve greater financial success in your 20s, 30s and beyond.

Step 1: Stash Your Money in the Right Place

One of the first things you should do is set up a checking and savings account. The checking account is where you can access the cash you need to pay your bills, and the savings account is where you can set money aside for longer-term goals.

How do you squash the urge to spend every penny you earn? In a word: budget. It’s fun to finally be an adult and afford nicer things, but all adults have to make tough choices about what to spend their money on.

Tally up your must-pay-for monthly expenses, like rent and car payments. Subtract that from your monthly take-home pay (that’s what you earn after you pay taxes). Aim to save about 20% of what’s left. Whatever hasn’t been set aside for needed expenses and savings is available to spend.

You can trick yourself into saving by automating. If your job allows for direct deposit of your paychecks, you can allocate a percentage of each check to your savings account. Or you can set up an automatic transfer each month from your checking account to your savings account.

Start by saving one month of your take-home pay. As you start to accumulate more savings, consider moving your savings to an online money market account so you can earn more interest on it. Keep saving until you have at least three months of savings set aside for emergencies.

Step 2: Pay Off Your Debt

Many students finance their educations by taking on some student loans, so if you have some debt after college, you’re not alone. It’s really important to prioritize paying off debt.

So while you’re setting money aside for savings each month, pay extra on your debt payments as well. This might mean you have less cash available for fun stuff while you pay your debt down. But the sooner you’re debt-free, the sooner you can earmark your money for other financial goals.

If you have Federal student loans, you’ll be given a six-month grace period before you have to start paying your loans back. Use this time to build up your emergency savings and rid yourself of credit card debt.

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Step 3: Pick Out Your First Credit Card

If you’ve never had a credit card before, now’s a great time to get your first credit card and get the hang of using it responsibly. Look for a no-fee card that earns you rewards like cash back.

Start small by charging a manageable amount each month and pay your bill in full and on time. As you get more confident in your credit card usage, you can use it more often, and eventually apply for cards that offer even more rewards, like discounted travel.

If your lack of a credit history makes it tough to get approved for a credit card, you have a few options. A secured credit card can help you build credit—you put down a deposit and get a credit limit equal to or greater than that deposit. As you use the card and pay your bills in full and on time, you build the credit needed to get approved for other cards.

Set Yourself Up for Success

Handling your finances on your own for the first time can seem intimidating, but it’s imperative you do so. Follow a few simple rules and you’ll be on your way to paying off debt, building up savings and increasing your credit.

Legal Disclaimer: The articles and information provided herein are for informational purposes only and are not intended as a substitute for professional advice. 

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