How To Grow Your Money After Graduating College

by Meg Embry

Updated August 24, 2022 • 6 min read

Bad news, college grads: Your first job out of school probably won't pay as much as you think.

According to a 2019 survey, most graduates expect a salary of around $60,000. But the average salary for new graduates is actually around $50,000.

High earners skew the average. Many graduates make much less. Monthly expenditures for a single person in the U.S. are approximately $3,200. That doesn't leave much to work with after the bills are paid.

But when it comes to investing, you have something your financially stable elders don't: Time is on your side, young grasshopper.

If you start investing just one dollar a month when you're 20, then at the average annual rate of return — 10% — you can expect to cash out a hot $10,658.21 when you're 65.

Here are five strategies from the experts that can help you grow your money.

5 Strategies That Can Help Grow Your Money

1. Make a Spending Plan

"Your feelings about money will dictate your financial health and success."

It's easy to get spendy when you go from being a broke college student to having a regular income.

"But if you spend everything you make, you'll end up feeling just as broke as ever," said Caishalynne Echols, a new graduate who works as an accredited financial planner for Gen Y Planning. "And you won't have anything left over to invest."

She advises her clients to map out a better strategy by creating a spending plan. "The more aware you are of your spending habits, the easier it will be to grow your money and save more aggressively as your income increases."

  • First, categorize all of your transactions for one month.
  • Then, base your budgeting goals on that information.

Basic Spending Plan Items

Housing + Utilities
Transportation Costs
Groceries + Supplies
Pet Costs
Debt Repayments
Health Expenses + Insurance
Retirement Contributers
Emergency Fund
Personal Care

Budgeting is pretty straightforward, but that doesn't mean it will feel easy.

"That's because money is all wrapped up with emotions," said AskFlossie founder Claire Hunsaker. Research says the way you feel about money often reflects how you were raised.

"My mom was a single mom who was always terrified about money," said Hunsaker. "So what I learned was the terror, not the finances."

The sooner you work out the biases you were raised with, the better. "Your feelings about money will dictate your financial health and success. People don't avoid budgeting because it's hard; people choose not to budget because of how they feel about their budget."

"Get roommates!" says financial advisor Samuel Napp. "There is no greater financial hack than paying half or a quarter of your housing expenses. That's a major advantage of your 20s: living cheaply while earning seriously."

The Quad wants to make budgeting a little easier for you. Use our customized Google budgeting tool to start tracking your monthly expenses.

2. Spend Less on Loans

It's hard to grow your money when student loan payments are eating all your cash. But there are ways to spend less on your loans.

Student Loan Forgiveness Programs

Depending on your job, your federal student loans may be eligible for loan forgiveness programs.

Income-Driven Repayment Plans

Did you know that federal loans are automatically enrolled in a standard repayment plan? However, there are other options that may lower your monthly payments. For example, income-driven repayment plans are based on your current income.


Refinancing allows you to consolidate several smaller loans into one big loan, ideally with a much lower interest rate.

You have to have great credit to pull this off. But over the life of the loan, refinancing can save you thousands of dollars in interest without raising your monthly payments.

Moving Somewhere New

Okay, that sounds drastic. But some states actually offer student loan repayment assistance!

  • Illinois
  • Kansas
  • Maine
  • Maryland
  • Michigan

Remember: If holding debt is a big stressor for you, you can always make extra payments on your loans to pay them off faster. But if you want to grow your money, you may be better off investing instead.

3. Spend Smarter With Rewards Cards

"As a rule, when it comes to debt, if you don't get something back of greater value, you shouldn't borrow for it."

Using the right credit card for all of your expenses can also help grow your money.

You're probably thinking, "but wait, aren't credit cards the devil?" You aren't alone: After the Great Recession, Millennials are so financially skittish about credit card debt that only 33% of them even have one.

And it's true that credit card debt can be absolutely toxic. "The early 20s are when many, many people screw themselves with credit card debt that they have to spend their 30s digging out of," warned Hunsaker.

Napp advised, "As a rule, when it comes to debt, if you don't get something back of greater value, you shouldn't borrow for it."

But if you use a rewards card responsibly — paying it off in full, on time, every month — then you can avoid consumer debt altogether while reaping some major benefits.

  • Sign-up Bonuses: Credit card sign-up bonuses have gotten really good. According to WalletHub, initial bonuses are now averaging over $200. That's free money. Just don't open so many cards that you lose track of them.
  • Rewards: You can earn points with every dollar you spend, then cash those points in for gift cards, catalog items, or even travel expenses.
  • Cash Back: This is a big one. Cash-back credit cards will offer 2-6% cash back for all of your purchases. Spend money; get money. You were going to buy that toilet paper and frozen pizza anyway. A cash-back credit card will pay you to do it.

4. Make Investing a Habit

"The biggest mistake people make is not investing," said Napp. "Just be in the game, even if you're only in it a small amount."

Thanks to your spending plan, you now know how much money you have left over each month. You are getting cash back on your credit card purchases, and you have a little extra from a credit card bonus.

It may not add up to much, but time can make a mountain of your measly bucks.

"The biggest mistake people make is not investing," said Napp. "Just be in the game, even if you're only in it a small amount."

Echols says to think of investing like a ladder: The first rung is sticking to a spending plan. The second rung is contributing to a retirement account. The third rung is opening a brokerage account.

"At that point, I would recommend hiring an advisor," said Echols. Her company, Gen Y Planning, works specifically with younger clients. You can also sign up for brokerage accounts online.

Napp advises using the 80/20 rule. "At least 80% of your money should be in boring, highly diversified, index-type stuff. The other 20% can be for speculative investments."

Consider that 20% an investment in your understanding of the stock market, he says. If you lose the money on bad speculations, you're still getting valuable investment experience.

"Investing in dogecoin or gamestop is probably a mistake. But the precursor to wisdom is being the bull sometimes. This is the kind of thing you learn by doing, and it's better to learn early when the stakes are low."

5. Invest in Yourself

Financial planning aside, what is the most important thing you can do to grow your money?

"Seek out opportunities that will position you to earn more over the course of your career," said Napp. Even if that means accepting a role with lower pay in order to get skills you want.

"If I could tell my own kids one thing, I would say: Go where the experience is. Build skills in different areas that interest you, so that you are maximizing the longevity of your career and your earnings.

"Take the class, buy the books, earn the certifications: Put your money, your time, and your energy into investing in yourself. The long-term payoff will be massive."

Portrait of Meg Embry

Meg Embry

Meg Embry is a Colorado-based writer for covering higher education. She is an award-winning journalist who has lived and worked in Canada, the Netherlands, and the United States.

Header Image Credit: Nomad, athima tongloom | Getty Images

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