This weekend, I had the pleasure of watching my sister graduate Summa Cum Lade from the University of Arkansas. While in Fayetteville, I watched thousands of students receive their degrees, but I realized that most did not get a financial education on par with their newly minted degrees.
Here are some top tips for new graduates around the world.
Take Ownership of Your Finances
It is easy to let Daddy take care of your investments, but it is not a smart decision for your future. Do not turn your finances over to a parent/advisor/relative/friend blindly. I understand that most new grads have no idea what to do with a 401(k) when you find your first job. I asked my Dad for advice, but I did not have him do anything for me.
One of the biggest trends I see in adults with financial problems is a lack of responsibility. You are the only one that will care about your finances when you are older. No one is going to make sure you make your rent payments or have the resources to pay for a family. That is on you. Start your strong financial future today. Take responsibility for your personal economy and lay a foundation for success.
Build a Financial Plan
Now that you have taken responsibility for your finances, you should setup a plan. How much money do you need to live? What are the minimums for you to cover your rent, food, transportation, clothing, and other mandatory expenses? How much do you want to save for retirement? Do you have debts to pay off such as student loans or credit card debt? How much do you need for an emergency fund? Do you want to buy a home? Are you planning on getting married and need money for a wedding? What are your priorities? How much do you want to spend on hobbies?
Every question that implicates money is important to ask yourself. Based on that, build a budget. Setup automated investments and bill payments. Start investing in a Roth IRA. Consider using an income-driven repayment plan if you are struggling with student loans or refinancing if you have good credit. Try and figure out unique ways you can save money instead of just trying to same old, generic advice.
Have a Job
Okay, maybe this should be tip #1. You will not be financially successful without income. Even if it is not your dream job, get a job. Sure, you might want to walk out of school to cushy job as a CEO, but that is not realistic. Look for a job with growth potential so you can grow with the company and eventually reach your ultimate goal.
When I was in between jobs at one point, I worked as a server in a restaurant to keep my income going. I didn’t get a finance degree to work as a waiter, but I didn’t have a job and I needed money. No job is below you.
Let me say that one more time. No job is below you! Even Warren Buffet started as a paperboy. You need income regardless of where it comes from.
Never Stop Learning
My grandfather had to leave town early the morning after my graduation to get back to Fayetteville for a final. He was enrolled in a class every semester from when he retired as a professor until he passed away.
While that may be extreme for many of us, the philosophy behind it is one that we can all look to for inspiration. After I finished school, I worked for a year before enrolling in an MBA program. I still take religious classes regularly. I am looking into a SQL class later this year.
While I might not be seeking a degree with my classes these days, I am always trying to learn more. Whether it is about life, your career, or just something that interests you, never stop learning.
Find the Career that is Right for You
Give it a while before you decide whether you like your job or not, but use each professional experience as a guide to find your dream job. My first job was in a bank. I hated it. My second job was in accounting at a large company; I liked it but didn’t love it. My third job was in treasury at the same company. I found it exciting and challenging. My current job is doing something I enjoy with a great team.
It took me a few years to settle into an amazing job, but now I know what I love to do. Some people need to make bigger changes to find a great job, but it is out there.
Just don’t leave a job until you have a very solid plan for what is next. Don’t quit a job on a whim because you are angry or unhappy. Build a plan and leave your job gracefully once you already have a new one lined up.
Don't Forget to Stop to Enjoy The Experience
You don't need to rush to grow up too fast. You don't need to rush through life experiences. Slow down. Enjoy every minute. Travel. See the world. Spend time with people you care about and care about you. Find true friends. Find something you enjoy and do it. Make goals and do whatever you can to reach them. Avoid negativity. Have fun.
You only get one chance at life. Make it one that you enjoy and leave a legacy so people will always remember the great things you did for the world.
10 thoughts on “Money Tips for New Grads”
Thanks for mentioning Adaptu!
This is great advice. I will share it.
Thanks. Glad you enjoyed it.
Another piece of advice would be to save as much as possible now when you aren’t used to having the income. Once you get used to it it is so much harder to go back to not spending as much. Automatically put it away and forget about it.
Great point! Lifestyle inflation is the worst right after school when you make real money for the first time.
Brilliantly written. It made me recapitulate my college days where I have gone through almost all the above ideologies that’s been mentioned above. Student life is the key route of future endeavors. So its necessary to have the proper planning and go through the right direction in order to build own identity. I have learned a lot from my ups and downs, took hold of my finances and learned to handle them systematically, chosen a job of my choice, built my career and till today I am acquiring new things from people around me.
Sounds like you took a smart, well planned route from college to your career. Good job!
I love this! My sister just graduated from college and I will share this post with her – I wouldn’t mind a post about “Great Grad Gifts That Help Your Graduate Start Out Strong Towards Their Financial Future” – in other words, if I wanted to give her $200 to invest in something or even $100, what would be some good approaches?
That is a good idea Jenny. I will look into it.
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