New Grads Financial Checklist

Hi Money Masters,

‘Tis the season for donning gowns, tossing caps, snapping pics and celebrating education! That’s right; it’s GRADUATION season. It’s a time that is full of hope, courage, and making life-impacting decisions. Whether a new graduate from high school or college, these young men and women need to be armed with the knowledge and resources to start their independent lives on the RIGHT FINANCIAL PATH!

The following checklist is a great beginner’s guide for our new grads, however, for my seasoned Money Masters consider it a quick refresher course. 🙂

BUDGET

People are not born knowing how to budget. It is learned. But not all families let their children see the way the household finances are managed. Thus, when children grow up into adulthood, they do not possess this key knowledge. This can be very risky in that it sets our youth up for making bad financial decisions that have the potential to take years to mend.

Start with a basic budget that includes your expenses for:

Rent

Utilities

Food

Transportation (monthly gas expense/train or bus)

Student loan payments

Extras (clothes, entertainment, etc.)

CREDIT

$$$$$$$$$

Did I get your attention? Because, please, please, please, don’t skip over this section!!! Credit does not ONLY mean “charge cards”. It includes student loans. It is a different TYPE of credit, but still credit. According to Forbes, there are currently 44 million student loan borrowers. Whether this credit is from only student loans or both loans and revolving credit, it is imperative that you PAY ON TIME every month. Late payments can result in a negative impact on your credit score or late fees/fines. Credit is something to be used with control and caution.

INVEST/SAVE

You don’t need to know the ins and outs of the stock market to begin to invest your money. For a recent graduate, this can be as simple as finding out about your employer’s 401(k) program or an individual retirement account (IRA).

At this point in a young graduate’s life, saving or investing precious income may seem untouchable. However, if there’s ANY room to put even the smallest amount out of reach, it may prove handy one day to have an emergency fund saved.

FRUGALITY

It may seem tempting to explore the newfound independence that comes with graduating and starting a life on your own terms with reckless abandon. Of course, this is an exciting time! But, by staying frugal, it is easier to keep the future in mind. The financial decisions made today can have a tremendous impact (both positive or negative) on the finances of the future.

Enlisting the help of family and friends is a great way to stay frugal. Having a place of your own, doesn’t mean you can’t go home to a meal cooked by mom or dad once in a while! (Trust me, they won’t mind.)

Tell your friends to rotate their homes or apartments for get-togethers instead of going out on weekends. There are lots of ways to enjoy independence while keeping your finances in check.

There’s a segment from Dr. Seuss’ book “Oh, The Places You’ll Go” that is quoted often at graduations:

“So be sure when you step, step with care and great tact. And remember that life’s a great balancing act. And will you succeed? Yes! You will, indeed! (98 and 3/4 percent guaranteed).”

When young people have the tools of success at their disposal, they will go far!

Blessings to you always,

-Helen