Smart Financial Steps to Take After Graduation: A Guide for Your First Job
Starting your first full-time job after school can feel exciting and a little overwhelming. No matter what level of education you’ve completed, these financial steps will help you build a strong foundation for long-term success.
Your specific situation may differ based on your career, salary, and goals, but the principles here remain universal. Think of this as your practical playbook for managing money after graduation.
Why I Wrote This Guide
When I first wrote this “short” guide, it turned into seven pages, so I simplified it a bit to keep it readable and actionable. Each section includes real examples, simple steps, and resources that helped me go from a broke grad to financially comfortable in my 30s and soon to be independent.
These steps aren’t listed in strict order - personal finance is personal. You’ll need to prioritize what fits your lifestyle. However, one “set it and forget it” move you should do right away is signing up for your employer’s retirement match.
- Pay off student loans
- Sign up for retirement benefits
- Open a savings account
- Learn the basics of personal finance
- Track your spending
- Set goals and create a budget
Step 1: Pay Off Student Loans
Paying down debt reduces liabilities, improves cash flow, and accelerates wealth-building. Not all loans are created equal. Some have 0% interest for a grace period, others have low fixed rates, while some charge interest while barely touching the principal.
Compare your loan’s interest rate to potential investment returns. If the rate is high, prioritize repayment; if low, consider splitting your money between loan payments and investing. The key is understanding your repayment terms and how they fit your goals.
If your loan has a low interest rate, but is for some reason, structured in a way that barely anything goes to the principal at the beginning, perhaps you should focus on paying off the loan. As I mentioned, the key is to undersand your repayment terms.
Lastly, think about where you want to be throughout the duration of the loan. Would the loan prevent you from getting ahead? Maybe paying it off should be a priority? If the loan is manageable, maybe you can focus on some of the other steps of your financial journey while paying it off.
Step 2: Sign Up for Retirement Benefits (Free Money!)
If your employer offers a retirement savings match, like a GRRSP in Canada or a 401(k) in the U.S., sign up immediately. It’s free money that compounds for decades. Ignore the haters and everything they say. If your employeer matches your contribution, you just got 100% return on your investment before it even hit the brokerage.
Let's look at an example with a low match and a salary on the low end of the starting range for a new college/university grad as repored by Glassdoor at the time of me writing this post.
Example 1:
- Starting salary: $50,000
- Contribution: 2% ($1,000/year or $38.46 per pay period)
- Employer match: 2%
- Average return: 7% annually
After 10 years → $29,567
By age 65 → $530,241
With 3% raises → $790,721
That’s nearly $800K from a small biweekly contribution. Always take the match.
Now, let's look at these numbers if you are one of the luckier ones and start near the upper salary range and a slightly better match (note - all my employers have started me with at least 3% and up to max of 4%).
Example 2:
- Starting salary: $60,000
- Contribution: 3% ($1,800/year or $69.23 per pay period)
- Employer match: 3%
- Average return: 7% annually
After 10 years → $49,739
By age 65 → $718,668
With 3% raises → $1,423,298
Damn! Wow! Always take the match.
Step 3: Open a High-Yield Savings Account (HYSA)
Create a safety net by saving 1 - 6 months of expenses. Choose an online High-Yield Savings Account (HYSA). Major banks often pay almost no interest.
Even $50 per paycheque adds up. My small emergency after a year was able to cover about half of these unexpected expenses that quickly came up one after another:
- $560 dental bill
- $700 furnace repair
- $1,300 dishwasher & subfloor replacement
Saving $50 biweekly at 3.65% interest (the current rate Simplii offers) grows to $1,316 in one year—and over $135,000 by retirement. Combined with your GRRSP, that’s close to $1 million over your career based on conservative assumptions.
Step 4: Learn the Basics of Personal Finance
You don’t need a finance degree, just the essentials. Understanding key topics will make you smarter with money and more confident in life.
Learn these concepts at a minimum:
- Interest rates
- Taxes
- TFSA/Roth IRA & RRSP/401(k)
- MERs (Management Expense Ratios)
- Investment account types
- Basic investment options
Here are some recommended starter books
- Millionaire Teacher — Andrew Hallam
- The Wealthy Barber — David Chilton
- Beat the Bank — Larry Bates
- The Simple Path to Wealth — JL Collins
- The Psychology of Money — Morgan Housel
- I Will Teach You to Be Rich — Ramit Sethi
- The Richest Man in Babylon — George S. Clason
Most are available through your library or digitally on Libby/Overdrive. Prefer video? Watch credible financial educators but avoid “get rich quick” or crypto hype channels.
Step 5: Track Your Spending (Before You Budget)
Before setting limits, understand your habits. Tracking expenses first helps you see where your money actually goes.
How to Start
- Use a spreadsheet (Excel or Google Sheets).
- Manually record every expense for 2 - 3 months.
- Categorize each expense (rent, food, gas, etc.).
- Review totals monthly and look for trends.
Once you’re comfortable, switch to a budgeting app like YNAB or Mint. I’ve used YNAB for over a decade and love its simplicity.
Step 6: Set Goals and Create a Budget
After tracking for a few months, set clear financial goals and create a budget from there. My immediate financial goals after graduation were:
- Pay off student loans at a painful rate of $1,600/month
- Build emergency fund at a slow pace of $100/month
After you establish your financial goals, take stock of your fixed expenses. Fixed expenses are those that have a fixed, i.e. expected cost that doesn't usually fluctuate, and will always be there month after month. These include things like rent, utilities, insurance, etc.
Here’s how my first budget looked on a $3,000 monthly take-home (after my GRRSP contribution):
- Student loan: $1,600
- Savings: $100
- Rent: $400 (shared apartment with 3 other people)
- Insurance: $180 (vehicle and renter's)
- Phone/Internet: $80 ($50 for a cell and $30 for my share of the Internet bill)
- Leftover: $640 for groceries, gas, and fun
Living downtown Toronto in the late 2000s/early 2010s, the $640 was tight but manageable. One thing I had to sacrifice temporarily were personal investments. But at least I was paying into my employer's retirement plan so I was making some progress. The key isn’t perfection, it’s staying below your income and adjusting as you learn. A secondary benefit to having a budget is adjusting your lifestyle to living on less. This will be very helpful as you transition into retirement.
For detailed steps and more details, check out my long-form budgeting post.
Final Thoughts: Stay the Course
Building a strong financial foundation takes consistency, not luck. Keep budgeting, tracking, and adjusting. Celebrate small wins but don’t lose focus.
My wife and I sacrificed fun in our 20s, but by our 30s we had financial comfort and are close to being independent. What does comfort look like in our 30s? My wife has been home with our kids for nearly a decade, and we’re still on track to retire multimillionaires thanks to the power of compound interest, staring early and steady habits.
Start small. Stay consistent. Let time do the heavy lifting.
