In an instant:
- You graduated from college – congratulations! What now?
- Talking about money is not always easy, but often it is necessary.
- Creating healthy financial habits can help you set up for long-term success
Greetings to you, graduate! You studied hard, finished your exams, and now you have your diploma.
Now that you have a degree, you will probably enter the workforce or start graduate school. Or maybe you take a different path. But no matter what you do, you need to learn how to set yourself up for financial success. But how?
Talking about money with your faith is a good first step. Unfortunately, because the subject often makes us uncomfortable, we avoid it. But the reality is, the sooner you educate yourself, the sooner you will be on the path to financial success. So where should you start? Since many recent college students have student loans, this is a great place to start planning how you will repay it.
It is important to have a plan for how you will repay a loan, and student loans are no different. The sooner you pay them, the less interest you will pay over time. One way to reduce the principal and the time you will spend to pay off is to pay more each month. Now paying more to the principal means paying less overall. And if you have more than one loan, consider repaying the loan at the highest interest rate so that you pay the overall interest.
A budget is a great way to keep track of the money you earn and the money you spend. Creating a plan for how you will save and spend your money based on your monthly income and expenses can help you live your way. Set goals for how much you’ll spend on rent, food, entertainment, clothing, and transportation – then try to stay with them. Don’t worry if you don’t get it right the first time – you may have to adjust when deciding which one works best for you. And since savings and investments are essential to your financial well-being, your budget should include both.
Savings for retirement and much more
While leisure may seem light years away now, it’s not too early to start planning for it.
Be sure to take part in your employer’s retirement plan if an offer is made. If you do not have the benefits of a retirement plan, you still have options such as the endowment or the Roth IRA. Save 12-15% of your total (pre-tax) annual income, or work towards savings, including any employer contribution (which means they will match a certain percentage of your invested money – it’s like free money!). It’s also important to save in an emergency like an unexpected car repair or medical bill. You may want to keep your emergency funds in an easily accessible account such as a taxable account or Roth IRA.
Congratulations on reaching this next step of setting yourself up for success. Establishing healthy financial habits may seem overwhelming at first, but in the long run it is worth it. Your future will thank itself!
All investments are at risk, including the potential loss of money you invest.
“Top Investment Tips for College Graduates”,