When asked the question “How should recent college graduates invest their money?” your answer may come in the form of another question: “What money?” And that’s completely valid. College students are notorious for being broke, and there is no reason to expect that to change once they graduate. Most college graduates have a hard time finding their first job, and it takes them at least a few months until they can start making any real money. A common problem for college graduates is coming up to their first student loan payment with no income, no job, and no savings account.

The financial dilemmas don’t stop there as most college graduates run into other money issues as well. The lucky ones that find a job right off the bat run into a fortunate but still challenging dilemma. They start getting regular paychecks, ones that are bigger than they’ve ever had before. Now, they have to figure out what to do with them.

No matter how great a job you get, it is unlikely you will have too much money left over after student loan payments, rent, food, and utilities. But instead of frittering that money away, it would be smart to do something productive with it. Whether you graduated from UCLA or got UIC’s nursing informatics degree, this guide can help you figure out how to invest your money as recent college graduate.

Savings Account

That’s right! The simplest answer is often the right one. Open up a savings account and let your money grow in there. It is a completely risk-free investment, and your money is guaranteed to grow, slowly but surely. You will also have access to it at any time if things ever go south.


A 401(k) is a retirement fund that will be set up through your job. It may feel a little bit too early to worry about this, but if you start putting money into your 401(k) now, you will be thanking yourself years down the line. As many commercials for retirement planning firms will tell you, it is never too early to start planning for retirement.

A Friend’s Business

You are young, you have a full-time job, and you are looking to turn your money into more money. You don’t have to worry about providing for a family, or making mortgage payments. Now is the time to take some risk. If you invest in a friend’s business, the whole thing could go down in flames in two months. Or in two years, you could have tripled your investment, or more. This could be a great way to get into the ground floor of a potentially great business.

Your Own Business

With the rise of the internet, there are now plenty of ways to have small, part-time business ventures with low risk and little overhead costs. If you have ever had a great business idea, this may be the time to see if it is as great as you think it can be.