Four years of hard work have finally paid off and you’re ready to start your career and life after school. With this transition comes new responsibilities, including learning how to manage your finances. 

Although you may have more disposable income, you’ll also have more financial obligations, and even minor missteps could put your financial health in jeopardy. As you prepare for this next life stage, here are four common money mistakes to avoid: 

  1. Not Creating a Budget

Between housing, transportation, and groceries, you’ll likely take on more financial responsibilities after school. Managing these new expenses will require you to keep better tabs on your spending and to create a budget so you can ensure that you’re able to meet all of your obligations. With an established budget, you’ll know exactly where your money is going, so you won’t have to stress as much about your finances.

If you’re not sure where to start, try downloading a budgeting app or creating a tracking system to monitor spending. Understanding your financial health and budgeting accordingly will help you better allocate your money. 

  1. Not Setting Long-Term Goals 

Just as budgeting for your immediate expenses is important, also set long-term objectives for yourself. Think about where you want to be financially in a few years, and start factoring savings into your budget. Setting your eyes on long-term goals can help you better plan out your finances and keep you accountable for reaching financial milestones. 

You may be pursuing multiple long-term goals at the same time. For instance, if you’re in the process of paying off student loans while also saving for a home, you should start planning well in advance. In this case, you’ll want to consider developing a debt repayment plan or figuring out how much house you can afford, as these are important steps for achieving both.

  1. Ignoring Your Credit Score 

Your score is vital to your financial health as it’s used by lenders and employers to evaluate your ability to manage your money. It can help you secure financing for major purchases, like a home or a car, at more favorable rates in the future. 

While you may not have much, if any, credit built by the time you graduate, there are a few quick ways to boost your score:

  • Make on-time payments: Avoid falling behind on bills or loan repayments. 
  • Apply for a credit card: Keep utilization low and pay your balance in-full each month. 
  • Become an authorized user: Have a family member with a low balance and good payment history add you to their account. 
  1. Racking Up Debt 

Having a credit card isn’t bad, as long as you’re able to use it responsibly. However, one of the worst things you can do after school is rely on a credit card to fund a lifestyle that you’re not able to afford. That’s why you should first understand how credit cards work and ensure you’re able to pay off your balance each month to avoid falling into poor money habits and accumulating debt. 

While creditors offer intro 0% APR periods to lure new graduates, credit cards will eventually accumulate interest, making it even harder for you to keep up on monthly payments while also balancing other expenses. This can put you in a bad spot if you’ve racked up more debt than you can afford. 

Money missteps can jeopardize your financial health, but most are easy to avoid. As you prepare for graduation, keep these financial tips in mind to ensure you start your life on the right financial foot.