The Best Money Moves for New or Recent College Graduates

When I was younger, and just out of college, I felt like I had finally hit the “real” world.  Not that being any younger means that you aren’t in the real world, but for some people, it seems like there is some kind of bubble they’re living in all the way through 22 years old.  It’s all about academics, having fun socializing, and preparing for the future for some people, it seems.  Yes, I was one of those people. I know that many of you reading this weren’t (or aren’t) but I was.

I was fortunate enough to have a full-time job right out of college, having been recruited for the role.  After that, it seemed like things had changed.  All of a sudden, I had my own apartment with no roommates, along with a salary.  I also had some basic responsiblities, such as taking care of my place, paying the bills, and routine things like that.  Otherwise, I was free to do as I pleased.

How times change! Being older now, with kids and much bigger responsibilities, I can look back and think about how I handled myself back then and the moves I made.  Overall, I think I did fine, and really worked hard in some areas of life.  I wouldn’t have gotten to this point without that hard work, and the good decisions that I did make.

However, I certainly didn’t have all the answers back then.  Not that I do now, of course!  Yet I do have the benefit of life experience and perspective now, and can make some assessments on what moves I could have made.  Based on my own life, as well as the experiences of countless others I know, I have some thoughts as to what financial moves would be good for people in their early 20’s to consider.

Here are my ideas for 5 top money moves for people in their early 20’s recently out of college:

1 ) Build Your Career. 

Now, I say this knowing that not everyone knows exactly what they want to do.  Some people go straight from undergrad to grad school – medical school is one example.  Such people were probably highly driven early on, very bright, AND knew what they wanted to do.  There are many other people with the first 2 traits, but maybe not the notion of what they want to do.  This is okay, as we often need experience in order to figure some things out.  But figure it out we must.

For many people the first big hurdle these days is finding that first full-time job.  Once obtained, this the time to gain experience and work the long hours to get ahead.  Later in life, with kids in the picture, you won’t have as much time or energy to do this.  Get a foothold, build a professional network with value, and start making your mark.  This early experience can be a great building block for the rest of your career or even future entrepreneurial efforts.  Speaking of which, you shouldn’t be stopped from entrepreneurship early on.

2) Live Modestly

I could say live appropriately, but what I mean is that we should avoid spending excess money on pricey apartments.   Now, this doesn’t mean we should compromise safety or other basic, or purposely sign up for some rotten commute.  Rather, let’s try to spend as little as possible for housing. 

I actually rented at a very nice apartment complex right away, and it was the very best one in the area.  I could have saved a fair amount of money by living elsewhere, but I wanted to live in a certain place. Live and learn, I suppose!

A good alternative might also be getting a roommate.  Splitting rent and utilities can really help with savings efforts.  An even better move might be living with parents, if it’s comfortable enough and they’re okay with it.  I have to say, I don’t understand the mentality that many people have around their newly grownup kids not being welcome to come back home.  While I moved out on my own when young, I also realize that in many cultures it’s totally normal and perhaps expected for multiple generations to live together.  If parents and their kids could wrap their heads around the massive savings possible for the kids, instead of viewing it as shameful freeloading, people could really save money and build a financial foundation.

3) Drive a “Good Enough” Car.

Nobody needs a really nice car when just starting out.  I have 2 friends who made the mistakes of spending a ton of money on new vehicles.  One guy bought an expensive sports car that was probably 2/3 of his annual income, then traded it in for different one that was just as pricey.  He is now a successful high net worth individual who drives a 12 year old car, and says that he will drive that car into the ground.  Clearly, he figured out what is important.

Another friend bought an expensive SUV when he got his first job, and told me he “needed” it, and wanted to “feel like I’ve arrived”.  He’s now doing quite well, and seems really responsible.

There’s a good post worth checking out, with a car buying rule, that fits the concept of driving a “good enough” car.

4) Don’t Waste Time on Mr. Wrong or Miss Wrong.

This might not seem like a money tip, but it is.  I’ve seen people waste untold amounts of time and money on people who were not right for them.  It might have been apparent to others, but not them.  Just imagine if they would have valued what they as individuals brought to the table, and didn’t settle for something less?

A big thing is choosing to live in a city you don’t want to live in, just to follow someone.  Okay, maybe that can work out well and I know it does for a lot of people.  But tread carefully!  I know one guy (who was actually in his later 20’s) who found his dream job with pay that – from what I heard second hand – was truly exceptional and well beyond what he was making before.  He took the job, then quit and moved away after 1 month to be with his “true love”.  Well, the true love ended up dumping him within 1 week.  Yes, 1 week! No love, no job, and back home he moved with his finances severely hurt.

He threw away a great career and life opportunity.  Now, I haven’t kept in touch with the guy in a few years, so I don’t know what he’s up to now.  Little consolation for him, but hopefully others can learn from his fiasco, and not lose valuable time, money, and financial potential on a situation that’s not a great fit.

On the bright side, what if you do find Mr. Right or Miss Right? You’re blessed, and don’t let go!

5) Don’t Carry ANY Credit Card Debt

Credit card debt is not good to have.  Sometimes people can get into difficult situation that requires them to pursue debt as help.  However, many people carry credit card debt because they aren’t able to discern wants from needs.  When they figure it out, it can be painful.

There was a guy I worked with who also bought a nice car that was beyond his means – I suppose we can add him to the two I mentioned above, as I just thought of him now.  Anyway, this guy not only had that car, but also went to all kinds of expensive concerts and sporting events.  We were joking around with him at lunch about him not knowing what a savings account was, and he just brushed us off with a smirk and said he didn’t care about any of that stuff. Life is too short, he said!  By the way, this guy was a financial analyst. Go figure.

Well, a few years after that, he told me that he would be stuck paying bills until he was 30.  He later met a woman who he ultimately married, who shaped him up financially.  Over dinner, he told me how she hated any and all debt, and how she forced him to change.  He went on an introspective tangent where he stated that he must have learned his habits from his parents, who simply used credit as an easy tool to get money when needed for anything.  It was great to see him learn his lesson, but clearly it took him years to recover, and a smart wife to teach him how things work!

How it All Ties Together – collectively, these moves involve making sure we earn money, and then ensuring that we avoid common traps that cause us to overspend.  Ultimately, main idea here is to save as much as possible when younger.  Then, we can invest intelligently and let compounding work its magic. Later in life, you’ll be VERY glad you saved and invested.  I know I am.

My Questions for You

Did you follow (or are you following) any of these tips on money moves in your early 20’s?

Which ones have worked best for you, and what do you wish you could have done differently?

Do you have any more to add?


  1. says

    So glad I found your blog today! I love your posts.

    I’m in my 20s and I’m currently following all of these suggestions…except for #3. I bought a new car. BUT I had saved up for 2 years AND I traded in my old car, which combined for quite a down payment…so that’s okay, right? haha At least thats what I tell myself.

    I definitely agree with the first one on building your career. Life will get so busy in a few years, so I’m working towards my CPA license now and I just passed my QuickBooks certification exam yesterday. That really is good advice. Knock out as many career goals as you can early on is what I’ve been told!

    • Squirrelers says

      Kristen – great, thanks for the kind words! Sounds like you’re busy on that career, that’s great. As for the car, I think your example actually shows responsiblity because you saved for that purpose and traded in a car. So many people buy a car almost spontaneously or with little thought.

  2. says

    My vote is for Number 1 being the most important. It is not a nice feeling graduating and not having any idea what you want to do or where to start.

  3. says

    Number 4 is so true in more ways than one. Not only can Mr. or Ms. Wrong cost you financially, they can drain you of your drive, focus, and initiative at work and in life thus costing you even more.

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