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When you’re done with college, you will often hear people say “congratulations, graduate,” but you probably won’t hear a lot of important advice about Personal Finance.
Graduating college is exciting, but it is also a little scary because you will soon enter the “real world” and you’ll have to make important decisions with your money. Out of all the possible graduation words that you will hear, this is the most important advice for graduates.
If you make smart financial decisions as a graduate, then you will reap the benefits. But, a couple of rotten decisions could delay your financial success. Congratulations graduate, here are the 7 best examples of Personal Finance Advice that you need.
1. Plan To Move Out Of Your Home (Eventually)
There’s nothing wrong with moving in with your family after college. More than one in three graduates will live at home after their education is over.
While it is acceptable to live at home upon graduation, you need to create a plan to move out. Organize a budget, get a job, and determine the cash flow that you will need to move out. It is part of “adulting” and it will help grow your personal finance skills.
2. Pay Off Your Student Loans ASAP
The longer that you have your student loans, the more you will probably regret it. Most students graduate with tens of thousands of dollars in student debt, plus interest. The sooner you pay it off, the more financial options you will create.
To help pay off the loan quicker, graduates could refinance to get a lower interest rate. There are also student loan forgiveness programs as well.
3. Don’t Give In To Credit Card Temptations
Credit card companies are known for targeting young people and college students. As tempting as it might be to get a credit card, you really shouldn’t plan on doing that. Credit card debt is at a record high in the United States, and the interest rates for credit cards are ridiculous. You don’t need a credit card to achieve lasting financial success.
If you’re trying to raise your credit score, then you don’t need the credit card. The simple act of paying your student loans will help with that.
4. Congratulations Graduate, Start Saving For Retirement Now
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As soon as you get a job and your finances in order, you need to start saving for retirement. Whether it is a 401(k) or an IRA, you should start the process now. If you start saving $5,000 a year at age 25 in a investment account for retirement, then by the time you hit 65, you will have $1 million. Congratulations graduate, you might be rich some day.
If you want to get started with investing for retirement and you want to make a positive impact in the world, sign up for Swell Investing.
5. Build An Emergency Savings Fund
If you want to move out, then you should have an Emergency Savings Fund of at least three to six months worth of expenses. This money will help if you lose your job or have expensive medical bills.
The money in your emergency savings fund should be stashed away in a savings account or a money market account
6. Start Tracking Your Expenses
Before you move out, you need to create a budget for your living expenses. That will require tracking of all your spending. It might seem difficult to do, but it help you determine what expenses you could eliminate, which helps save you money.
Try using online financial software like Personal Capital, which automatically tracks all of your expenses.
7. Look For A Job With The Right Benefits
You’ll be lucky to get any job in your field when you graduate — even an internship. But the day will come after you graduate when you will have a full-time job offer. In addition to salary, the benefits are what really matters. Some of the top benefits offered by employers include commuting benefits, a 401(k), and help with student loan repayments.
The most important benefit might be health insurance. Even if you are still under your parent’s health insurance plan, eventually you will be on your own. Start planning for that now by seeking a job with good benefits.
Congratulations graduate, you are now entering the “real world.”
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