Congratulations! You've worked hard on your degree and are ready to move forward with your first job and other major life decisions. While your degree and this first job don't necessarily set your life in stone, now is a crucial time to start making smart financial decisions to set you on the right course for the future. The prospect of savings can seem overwhelming when living expenses are soaring and 44.7 million Americans collectively hold $1.56 trillion in student loans — and not all college graduates are going to seamlessly jump to a well-paying job. But even if you can't act on these tips immediately depending on the type of job that you get and other circumstances you may have, keep them in mind for this critical early stage of your professional life. 1. If possible, max out your 401(k) plan contributions. The maximum allowable contribution to 401(k)s and most other retirement plans for 2019 is $19,000. That can seem like an insurmountable contribution after factoring in rent, student loans, transportation, and other necessities. But even if you can only contribute a small amount, such as $200 per biweekly paycheck, it adds up quickly to $2,600 per year. That comes nowhere near the $19,000 annual cap but the most important reason to do this taking advantage of an employer match. If the employer matches dollar-for-dollar, that's $2,600 in totally free money. You avoid taxes on the $2,600 (or other amount you contribute) and you don't have to pay tax on your employer's match. Those funds will grow over the years. Plus, if your income is low enough, you can take advantage of the Saver's Credit to get a small reward at tax time for your contribution! 2. Consider a Roth IRA if you don't have access to a retirement plan at work. Sometimes we have to take a job that doesn't offer the best benefits (or any at all) before moving on to greener pastures. But it shouldn't stop you from saving for retirement. An IRA has a cap of only $6,000 per year but is the cheapest and easiest solution when you don't have access to an employer plan. Consider a Roth IRA because you're in a low tax bracket now, but can exponentially grow this money tax-free for decades. You can double-dip with the aforementioned Saver's Credit, as most recent grads are likely to meet the income guidelines. 3. Thrifting, eBay, and similar resources can save you money on a professional wardrobe. It's a good idea to avoid spending too much on clothing, but you probably have the double-edged sword of needing professional clothing for job interviews — even if the job you get hired for winds up having a more casual dress code. You might have a significant upfront expense if you immediately land interviews and have no suitable clothes, thus you have to run out to a store and buy something right away. But if time is on your side, you can save a lot of money on professional clothing by scouring eBay, Poshmark, thredUP, and similar websites. Many even have clothing that's new with tags and in hard-to-find sizes. If you have difficulty at retail shops, this is a crucial time where you'll want to take advantage of getting that $50 blazer for $10 on eBay. If you don't have hand-me-downs from friends and family as an option, Dress For Success, Career Gear, and similar charities offer free clothing to college grads and anyone else in need of professional clothing, and some locations even offer help with resume writing and finding jobs. 4. Make a calculated decision if you have to move for a job. Moving for a job is always a highly personal decision. It may benefit you long-term to relocate if the new location has more opportunities in your industry than where you presently are. But how long do you think the job will last? Has the company been in business for a while? Moving can be an expensive disaster between lost security deposits, travel and hauling expenses, and loss of friends, family, and support networks which has both a financial and emotional impact. Even if you're not traveling far, the average interstate move costs $2,300. If you expect to move often for jobs, this can lead to credit card debt that spirals out of control or continual moving for progressively better jobs. Carefully consider this decision each time since job security is not as much of a given as it once was. And, remember moving expenses for jobs are no longer tax-deductible thanks to the 2018 tax reform. As a recent college graduate entering the “real world” for the first time, it can be overwhelming trying to set yourself up for financial success in the long-term. If you have any questions about other personal finance or tax planning tips, please contact our office.