If college graduation is in your recent past or near future, then now is the time to start your adult personal financial situation off on the right foot. The habits you start and decisions you make now are going to impact your life exponentially in magnitude in the following years. Keep reading into the following paragraphs for some money tips that you can use.
Advice for Recent College Graduates & Money Tips
Changes in the law recently should enable you to keep from having to get your own health insurance until your 26th birthday. Of course if you find full time work that offers this perk, you should have no problem. Still, if you do not, exercise your right to stay on your parent’s plan until then to spare yourself the cost of standalone health insurance. You might can get away with no insurance for a while, but this is both risky for you and soon to be illegal.
Start savings with your very first paycheck. Do not put this off until later. What you start now you might keep doing out of habit well into your thirties. Even if it is just five dollars in a piggy bank or jar, save something from each and every paycheck. The habit should grow gradually on its own.
As your savings grow, you want to start thinking about the point where you switch from emergency savings to investing. This number is ideally going to be eight times your monthly essential expenses. Once you have that number set aside, you can use your excess to split between enjoying life and investing for retirement and a home of your own. This is one among the money tips
Once you are saving for retirement, consider the Roth IRA savings vehicle, if you are eligible. The tax benefits that this scheme provides are just far too potent to ignore.
If your employer has a 401k plan, find out how much their matching contributions are. You need to invest at least enough to capture the matching funds, otherwise you are leaving free money on the table and there is no worse financial decision than saying no to free money.
If you have credit cards, start paying them down. There are several different approaches that can all lead to success, so choose the one right for your circumstances. At a minimum, transfer balances from higher interest cards to lower interest ones as often as you can. After that, either start paying down the smallest balance first, or the one with the highest interest rate. Financially speaking, paying down the highest interest rate first makes the most sense, but sometimes, just wiping out the smallest credit card is more easily attained psychologically.
Track your spending. Even if you are saving every paycheck, you still need to formulate some kind of budget. If you do not know what your monthly essential expenses are, you will never be able to accurately compute your emergency reserve, nor will you ever know what your disposable income looks like.
When you hear that you are entering the real world, you and your professors (especially your technically minded physics professor) are likely to object that your college campus is actually in the real world. What it really means is that you are leaving the last layer of your childhood bubble and having to work for a living and support yourself. Use all these money tips to make the right moves early for a successful life.
