This post was contributed by our Financial Literacy Movement partner Ally Bank.
Students generally engage in only the most basic of banking practices in college. With commencement, though, the graduates’ banking habits must evolve. For one thing, as soon as graduates enter the workforce, they should start saving money for the day they’ll leave it.
To gear up for life after graduation, there are two smart banking moves grads should make to help them jump-start their savings habits.
1. Automate savings. True, between paying college loans and taking home entry-level salaries, many college grads can barely make ends meet, let alone save money through smart banking. But the sooner they can start saving — both for short-term and long-term goals — the better.
Automated savings can help graduates achieve this goal. Many employers let staffers direct-deposit checks into more than one account — so one part of a paycheck could go into a checking account, another into a short-term savings account and another into long-term savings.
Another option: Many banks allow you to set up regular monthly transfers. So you could, for instance, set up a transfer that moves funding from your checking account to your savings or money-market account each month.
2. Participate in employer 401(k) funds. Aside from setting up automated savings, recent graduates should take advantage of any 401(k) plan offered by their employers. When an employer offers to match a worker’s 401(k) contribution, it’s essentially giving money away.
So even if a 401(k) fund made no money in a given year, if the employer matched the employee’s contribution by 25 percent, the employee is still up 25 percent for that year.
With these saving measures in place, new grads won’t have to worry about how to save money with banking — they’ll just have to decide how much to save.
This article is part of the Go Banking Rates Financial Literacy Movement, helping Americans get smarter and grow richer. Take our Bank Like a Billionaire quiz to test how knowledgeable you are!