Money Advice for Graduates

by Jason Cabler on 12:01 am · 9 comments

in being prepared,cars,college,Goals,Uncategorized

If you’re one of the many new college graduates and you need advice on how to start your post graduation financial life the right way, then you’re in the right place.graduation graduates

When you’ve graduated and you finally get a job and start your life in the working world, it can be scary and confusing because you’re experiencing a lot of new things at once.  This can be especially true when it comes to finances, because once you graduate and get a job in your chosen field, you’ll probably be making more money than you’ve ever made in your young life, and that presents challenges that you may not have faced before.

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Whether you graduate with a degree in IT, finance, teaching, or whatever else, if you make the effort to start managing your money well in the beginning, you can avoid many of the new graduate pitfalls that so many young people fall into.

So here are a few tips to get you started in the right direction:

 

If You Graduated With Student Loans, Pay Them Off NOW!

Yes, I know you can’t pay them off this minute.  But if you’ve graduated with student loans the last thing you want to do is spend the next 20 years paying them off.

Do something radical.

Live with your parents for a couple of years out of college, if they will let you, and put the vast majority of your income toward those loans.  Do that and you can have them paid off in a year or two after graduation.  Yes, it’s radical, but it will save you literally decades of payments that will seriously interfere with your future ability to comfortably buy a vehicle, a home, and raise a family.

 

Don’t Buy a Car Just Because You Got a Job

If you can rid yourself of the idea that you need to get a car payment after graduation because you “deserve” a new car, the better off you will be.  You CAN pay cash for your next car ( and every car for the rest of your life, for that matter) and it’s easier to do the earlier you start.

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Pay Yourself First

Most personal finance experts recommend saving at least 10-15% of your paycheck into savings and investments before you pay anyone or anything else.  If you make it a point to make this one of your primary financial habits, you will be wealthy in your future and you will watch in amazement at your friends who are making a good living yet struggling because they haven’t done this.

 

Do Not Use Credit Cards

Credit cards are a drag on your financial situation and only work to keep you poor.  Don’t let anyone tell you that you need one to build up a good credit score, or you have to have one to rent a car or a hotel room.  Those are myths.The less you take financial advice from people who are in debt, the better.

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If You’re Not Already Debt Free, Do It Now!

As a new graduate starting out in life you naturally want to start by making wise decisions that will affect the rest of your life.  If you have no debt as a new graduate, don’t get any just because you got a new job and you can “afford the payments”.

You can still get the things you want without credit cards and monthly payments.  If you’re already in debt, then make a plan to get out of debt and stay out.  Then work that plan until you’re debt free.  It is absolutely one of the best things you’ll ever do for your future, period.

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Don’t Acquire a Black Hole of Debt

You may have noticed that all of these tips revolve around staying away from debt.  That’s because when most of us graduate and begin a career, we move into an acquisition phase of life where we establish ourselves with our own car, furniture, gadgets, and maybe even a house.

It can be so easy to turn that acquisition phase into a huge black hole of debt that insidiously builds over the years and eventually can seriously limit how you live your life during middle age and especially your later years.

Contrary to the Facebook millionaires you see on TV, most wealth is built slowly and steadily over a long time by making smart decisions and practicing good money habits.

So to all you new graduates out there (Including my beautiful wife Angie!), get out there and knock’em dead.

And most importantly, STAY OUT OF DEBT!

 

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Want To Learn How to Quit Living Paycheck to Paycheck For Good?

My Celebrating Financial Freedom course may be just what you’re looking for.

It’s now available in in a new online video format!  You can learn more about the course here and watch the introductory video as well.

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Resources:

Obama, Student Loans, and You

4 Steps to Getting Rid of Car Payments Forever

Are Minimum Credit Card Payments Really Affordable?

7 Huge Credit Card Lies We Tell Ourselves

 10 Tips for the Graduating Class of 2012

Is Buying a Home a Good Investment?

Read more about Student Loans and Education

 

 

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  • http://jwfinancialcoaching.wordpress.com/ Jon White

    Great information. I always like to tell young adults that what happens financially in your 20’s does not stay in your 20’s. Making bad financial decisions right out of school usually carries over into your 30’s and 40’s.  But on the other hand if you make wise decisions in your 20’s with money those will carry over into your 30’s and 40’s. So really the choice is theirs, unfortunately I see a lot of college graduates doing what everyone else is doing and not looking at the long term impacts of their financial decisions.

    • http://www.CFinancialFreedom.com Dr. Jason Cabler

      Right, if you could just get a snapshot of what your life will look like 20 years into the future after making decisions now, more of us might think twice about the credit cards and the student loans.
      Have a great Memorial Day Weekend!

  • http://www.bluecollarworkman.com/ TB at BlueCollarWorkman

    The thing is, I never went to school, hell, I never even graduated highschool (got my GED later on), but a number of these things can apply to anyone. Get radical and do something NOW about debt or it will hang over you forever!!

    • http://www.CFinancialFreedom.com Dr. Jason Cabler

      No Doubt, the quicker you do something about it the better off you’ll be.  When you become debt free you have so many more options in life and the financial stress level goes waaaay down.  

      If you can start off in life debt free and never get into debt later you will definitely win with money.

      Thanks for the comment TB!