Many college grads are about to become responsible for themselves financially, but who knows if they are ready for the challenges of finding work, sticking to a budget, furnishing an apartment and managing student loan payments.

To the rescue: today’s guest post, courtesy of Dan O’Malley, CEO of PerkStreet Financial, a progressive online bank that offers debit card rewards. Here are his five financial tips for college grads.

1. Student loans: First thing to consider is how many student loans you have. If you are able to consolidate multiple loans with a single-loan provider, you can often get a lower interest rate. Some lenders also offer discounted interest rates for setting up automatic payments. Once you’ve secured all the discounts you can get, you’ll need to decide how much you are able to pay down your debt each month. According to the College Board, in 2007 the average debt per borrower was $22,700. And loans typically range from 10-30 years, depending on type and amount. It’s important to figure out how much you can pay off given your paycheck. Consider different scenarios on payment amounts to determine how much interest you can save by paying a little more on your loan each month.
2. Using credit: Credit cards make spending money easy and therefore lead to more spending. A Dunn & Bradstreet study showed that people spend 12-18% more when paying with a credit card. Switching to debit only can help keep you aware of spending, and some debit cards even offer rewards, such as the ones that PerkStreet street offers and which give 2% cash back. If you still choose to use a credit card, make sure to pay off your balance on time each month.
3. Finding your first apartment: Moving into your own place is exciting, especially if you’re finally moving out of a dorm or leaving a place that had too many roommates. But it’s important to bear in mind all the costs. Beyond the obvious things, such as rent and utilities, there are other less obvious costs. For example, there’s the question of transportation. If you’re looking at a place near public transportation, that could mean you won’t need a car, which could save you $5,600 annually–the amount 25-34 year olds spend on car-related costs.
4. New vs. used car: This is all about depreciation. When you purchase a new car, you pay a heavy price for that new car smell. Let’s say you decided to purchase a Ford Focus for the list price of $16,290. Edmunds calculates that in your first year the car would depreciate $3,400 and $9,000 over the first 5 years. With a used car you’re still going to have depreciation, but by avoiding the first year of ownership, you save a fair amount. Buying that Ford used will result in the first 5 years depreciation coming to $6,000. That saves you $3,000. Is that new car smell worth three grand? Another option: many cities now have car share programs that let you drive a car when you need it for a reasonable monthly subscription fee plus mileage. This way you have a car when you need it, avoid paying maintenance costs and don’t need to rent a space in a garage.
5. Save early, compound often: Carving out money to save is good and is a habit that once you start, you’ll benefit from for as long as you keep it up. Say you invested $10,000 when you turn 21, make no other deposits and get a constant rate of return of 7%. When you retire you’d have $196,000 in the bank. But if you wait until 35 to start? You’d have only $76,000 in the bank. Ouch! You’d be leaving $120,000 on the table because you missed out on all those early years of interest.