05/14/2020
Financial Tips For Grads
As the price tag on a college degree continues to skyrocket, it’s become increasingly important that recent college grads are financially savvy. Instead of gifting an inspirational book to the young adults in your life this graduation season, pass these tips on instead.
• Don’t ignore debt. Get a plan in place as soon as possible to pay off credit cards and loans. Pay AT LEAST the minimum due every month, and make extra payments when possible. Put extra money toward those debts that carry the with the lowest balance first. As you pay off the lowest balance, apply that payment to the next lowest balance and “snowball” the debts. Deb’s Note: I recommend reading and following Dave Ramsey’s book Total Money Makeover. Don’t use credit cards— pay off debt and stay out of debt to get ahead and stay ahead! If you make minimum payments only, you will pay thousands of dollars in compounded interest!
• Start saving. Even as you pay off debt, it’s important to save money from every paycheck. Tuck some away for retirement, and establish a savings account covering at least three months’ worth of living expenses. A steady, more generous paycheck is a nice addition to a new, professional lifestyle, but it is still essential to be financially prepared for any changes in the future.
• Take advantage of employer matching retirement plans. Many corporate employers will match a certain percentage of retirement contributions deducted automatically from your paycheck. If at all possible, invest the maximum amount that your employer will match.
• Reassess accounts and credit cards. Do a bit of research and make sure the checking account you have makes the most sense for your financial situation. Is there a bank or account with more flexibility and better benefits? The same is true for credit cards: Make sure you’re getting the lowest interest rate possible and any earned rewards match your lifestyle and interests. Pay entire credit card balance in full each month before due date, and potentially save hundreds of dollars.