Graduating from college is a huge transition, whether you’re moving into an advanced degree program or looking for your first job. On campus, everything is close by and walkable, and you don’t have to worry about access to food or housing. Once you’re out on your own, though, it can be intimidating to find a place to live, a job that puts you on your desired career path, and everything else that comes with being “a real adult.”
So let’s chat about the questions new grads have about how to handle their personal finances once they leave school. We asked recent and upcoming graduates from Heidelberg University in Tiffin, Ohio for their questions.
Living Expenses: How much does basic living actually cost?
It depends on where you live and what expenses you have, but we can use a national average to run some numbers. The average salary of a new graduate is $69,600 per year, but some careers that require a degree start far lower. For example, a degree in early childhood education starts at an average salary of $39,500 according to Think Impact.
Unfortunately, the cost of living continues to rise while wages aren’t keeping up. The average monthly rent for a one-bedroom apartment in the United States is $1,713 – or $20,556 per year, which would take up about half of an elementary school teacher’s salary or a third of the average salary.
It’s okay to look at these numbers and get angry, because they are bullshit. The rent is too damn high, and CEOs are stealing your money. But we don’t have time for that, because we’re trying to find you a new job and place to live without going broke.
Your basic necessities include food, shelter, transportation, and healthcare. Ideally, all of your spending on these categories would take up about 50% of your expenses, with the rest of your spending and savings coming from the remaining half. The particular balance of your necessities, discretionary spending, and savings will depend on your personal situation.
If your basic needs are taking up more than half your income, finding a way to reduce expenses can go a long way. Splitting the rent on a larger apartment with a roommate or two is more affordable than covering a one-bedroom yourself. You can also look for rentals that have utilities included, further reducing the number of bills you need to manage.
It’s not the desired solution when you’re starting a more independent adult life, but if you are welcome to keep living with your parents after college, this is also a great opportunity to reduce costs and be more aggressive toward financial goals like saving up a down payment for a house or paying off debt.
Credit Scores: Do they matter?
Yes and no. Credit scores are made-up capitalist bullshit, and they have no bearing on your value as a person. However, credit is a game we are forced to play because the only way to avoid having a credit score is to do everything with cash and never take out any debt—and 90% of Americans have debt, so that’s a tall order.
Your credit score is important insofar as it helps you get more favorable terms for your debts. Someone with a low credit score will pay higher interest because they are seen as a riskier investment for the creditor. A high credit score means lower interest rates and more options available to you for seeking credit.
We’ll write in more detail about credit scores and how to leverage credit in a later article.
Saving: How important is it?
Whether you’re saving up for an emergency fund, a specific purchase, or your future, saving is quite important! It teaches you to delay gratification and prioritize long-term benefits over the short-term, which is an important skill that we don’t always learn in school or at home.
Your starter emergency fund: To get started with saving, set a goal to save up $500 to $1,000 as a small emergency fund. This emergency fund is your buffer for when shit hits the fan, so you don’t need to turn to high-interest credit cards to cover an emergency. If you have family that can step in and help, a smaller $500 fund should be fine. The more independent your finances, the more you’ll want to save to keep between you and emergencies.
Your full emergency fund: The total amount to save for your emergency fund is up to you, and different experts have different approaches ranging from two months of expenses to a full year.
To determine the right amount for you, imagine the financial impact of losing your income. How long would you be able to stay afloat and keep the lights on? Do you have other incomes in your household? Would your childcare situation change if you were home instead of working?
Figure out the amount of money your household would need to survive a month without your income. That’s your first milestone for your emergency fund.
As of March 2026, Americans spend an average of 25.3 weeks unemployed before finding a new job. Getting your emergency fund up to cover six months of expenses would allow for a tight, but survivable, six months of job searching in line with the national statistics.
Sinking Funds: Saving up for a large payment or purchase can be done a little at a time, with a sinking fund. Each month, you’ll “sink” a portion of the amount needed so it’s ready when you need it. For example, switching your car insurance from a monthly payment plan to a six month policy will save money in the long term, but if you don’t have the full six-month premium ready in cash, you’ll likely opt for the monthly premium to save money in the short-term.
Either one is fine. But if you prioritize the savings, get a quote for that larger premium and put away a portion each month so it’s ready for you every six months.
You can also set up a sinking fund for a down payment, Christmas gifts, or a vacation. Anything you want to break up into smaller monthly goals is worth saving for.
Retirement: Is it worth investing?
Gen Z and Gen Alpha are inheriting a pretty rough financial legacy in the United States, and some folks are wondering if investing in mutual funds is worth it in the face of trade wars and a volatile relationship between fascism and the stock market.
Heard.
But it’s still a good idea to set aside money for your future retirement, and the sooner you start, the more you can gain with interest over time.
Start by contributing to any retirement plans offered by your workplace, especially if they offer a company match. If you don’t have a workplace plan, you can chat with a financial advisor to start your own retirement account. They can walk you through the options and answer any questions you have about how retirement plans work—don’t just give the reins over, make sure you understand what your money is doing!
Other questions?
What other questions do you have about creating a financially secure future? We are here to help!