It’s graduation time, and I’ve been getting a few questions about personal finances now that the “real world” has to be faced by college grads. Here is one question that basically sums up all of the questions I’ve got so far from grads:

I just finished college and I’m ready to get out there. Other than getting a job, what is the most important thing I should do in terms of my personal finances?

Well, I’ve got 5 things you should do to get your personal finances on track. If you can get these five things in line now, you will have laid a foundation for your future personal finances:

1. Consolidate your student loans. This is an important step. It reduces the number of payments that you have, and it can result in a lower, fixed interest rate. Many lenders will help you consolidate your federal student loans to really low rate — and will offer incentives for automatic withdrawal and 36 on time payments in a row. You should note, however, that private student loans will have to be consolidated separately from federal student loans.
2. Save your money. Now is the time to start saving money. You should build up an emergency fund, open a retirement account and create some long term and short term savings goals. All of these things will make a big difference down the road. You’ve heard the saying “pay yourself first.” As you get started in life, make sure you are setting aside money for the future. This means you may have to forgo some of the flashier luxuries now. It doesn’t have to be a lot; the important thing is to develop a habit of saving.
3. Buy insurance policies. Now, especially if you are relatively health, is the time to buy your insurance policies. Besides, chances are that — now that you have graduated — you won’t be able to piggy back onto mom and dad’s policies. You’ll need your own. You can get individual health insurance quotes, as well as auto, home and life insurance quotes, from a variety of sources. Look for policies that fit your needs. Consider tri-line coverage (life, homeowners/renters, auto) to save some money. Also, for life insurance, opt for a mix of term and whole or universal life.
4. Tame your credit card use. Hopefully, you’ve been taming your credit card us. If you have, keep it tightly under control. If not, it’s time to take charge of your credit cards and start paying them off as soon as possible. This is possible through planned aggressive debt reduction.
5. Read up on taxes. Gaack! Isn’t tax season over? It may be, but you do need to be aware of how taxes work. You need to realize that even when you start your job, there are tax implications. Learn about state and federal income taxes, as well as the FICA (social security) taxes. Also, you should understand how your retirement account and any other investments will affect your tax situation.

The important thing is that you start now to plan your personal finances. The key to financial success down the road is to start right now to build a solid foundation for your personal finances.