Financial Top 10 List for Grads
/Graduation is the perfect time of year to dole out advice to the young people in your life. As they are beginning their transition to financial independence, they seem to be a bit more open to learning from us old-timers. With that, here’s my financial top 10 list for grads.
10. Ignore ‘the Joneses’ – An independent financial future starts with being content with what you have and what you can afford to purchase with cash.
9. Educate yourself about investing – Start with basic investing books or take an adult education class or workshop.
8. Pay off your debt – Generally it’s best to pay off the most expensive debt first. Credit cards and car loans tend to be at the top of the list.
7. Pay your bills on time – Late payments can have a negative impact on your credit for many, many years. Building good credit can save you money.
6. Keep track of your spending – Use a cash flow/budgeting app to keep track of your expenses so you know where your money goes.
5. Consider your insurance coverage – Medical insurance is a must, but don’t forget renter’s insurance and long-term disability insurance to protect your paycheck. Consider life insurance if you have dependents.
4. Pull your credit report and score – See where you stand and take steps to improve your credit if necessary. Implement credit freezes at the three major bureaus to thwart identity theft.
3. Use credit wisely – All you need at this time in your life is a bank account and one major credit card. Don’t charge anything you can’t pay off when the bill comes.
2. Create an emergency reserve account – Start a savings account with a goal to build three to six months’ worth of your living expenses to be used in the event of an emergency.
1. Start saving for retirement now – Participate in your employer’s plan as soon as you are eligible. If your employer doesn’t offer a plan, start your own retirement account. Ideally you would save 10 – 20% of your earnings for retirement.
- Juli Erhart-Graves, CFP®, Worley Erhart-Graves Financial Advisors
