Tips for new university graduates

Question: I am graduating from college in a few weeks and am about to start my first post graduate job. Do you have any tips for making this transition and starting to manage my own financial situation?

A: Congratulations on your passage! We are in awe of your desire to take smart steps to secure your financial future early in your career. We often see college graduates entering the workforce with great opportunities, but end up creating years of debt and poor credit due to bad spending habits. Below is our top tips for college graduates who want to build and maintain a strong financial future.

Create a budget. Budgeting is relatively straightforward. Start with your monthly entry (take-home pay after appropriate withholding tax). Next, make a list of monthly cash expenses categorized into two columns – needs versus wants. For example, money for rent, food, student loan payments and the like are needs. Your “wants” may include a gym membership or a Netflix membership. You may need a car to get to and from work. However, depending on your salary and other expenses, you should buy an automobile within a price range that fits your budget. See how all of these expenses add up to your monthly entries and adjust them accordingly.

Prepare for student loan repayments. Since most student loans don’t require payment before graduation, or later, the monthly requirement can cause sticker shock for many graduates. If you can, consider budgeting more than the minimum payment required to help pay off these loans faster.

Tom Cooney with Wealth Dimensions

Practice deferred gratification. When it comes to creating a healthy financial future, you need to be patient and avoid instant gratification when it comes to your finances. Do you really need a new car or could you find a used one with lower monthly payments? If that’s an option, how much could you save if you took advantage of public transportation? To be truly productive in your financial planning, you need to understand the relationship of time to growing your money.

Consider composing. The “magic” of membership is that returning to your account in one period of time becomes the basis for your return in the next. At a modest rate of six percent, an investment will double in value every twelve years. One of the biggest financial mistakes many young people make is waiting until later in life to start saving for their future. Unfortunately, the longer you wait to start saving, the more money it will take to reach the same financial goal.

Start your nest egg. Start contributing to your company’s 401 (k) plan, if offered, as soon as you are eligible. Many young people start by contributing a small percentage of their salary now and then increase the amount in the future as they get increases. 401 (k) contributions are invested before tax (or after tax in the case of a Roth 401 (k)) and your account balance has years to grow and compose. Plus, your contributions can be matched by your employer, making your nest egg even bigger.

Use credit wisely. While many credit cards offer a tempting array of perks or points, don’t fall victim to credit card promotions. Unless you can pay off your credit cards in full each month, you shouldn’t be using them. By avoiding credit card debt and paying your bills on time each month, you will also get a positive credit score which will be important the next time you shop for a loan or insurance.

Have a back-up plan. Things happen, so it’s important to be financially prepared when your cell phone breaks or your laptop stops working. You should immediately start putting money into an emergency fund with the goal of accumulating at least 3-6 months of your spending. Having an emergency fund will also prevent you from accumulating credit card debt, when unforeseen expenses arise, like your car needing expensive repairs.

As you advance in your career and life, your responsibilities and financial goals will change. Learn as much as you can about personal finance by reading articles and books, listening to podcasts, and chatting with experts. Wealth is not created by what you earn, but by what you keep. Don’t be afraid to quickly contact a financial professional for advice – it could pay you dividends in your future.

Congratulations, graduate!

Crystal Faulkner is a Cincinnati Market Leader with MCM CPA & Advisors, a CPA and Consulting firm providing expert advice and beyond the bottom line thinking for today’s public and private companies. , large and small, not-for-profit, government entities and individuals. Tom Cooney works for Wealth Dimensions, an investment advisory firm. For more information call 513-768-6796 or visit online at You can listen to Tom and Crystal daily on WMKV and WLHS on “BusinessWise,” a morning and afternoon radio show that features high performing people, businesses, organizations and issues from across our region.

Source link

About Joseph Hedrick

Joseph Hedrick

Check Also

RNC night 3: Pence says Biden can’t be trusted to rebuild economy and keep cities safe

Vice President Mike Pence argued on Wednesday night that Democratic presidential candidate Joe Biden could …

Leave a Reply

Your email address will not be published. Required fields are marked *