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Advice for New Graduates
It’s that time of year when new graduates will be heading out on their own. Do you have some tips you wish you would have learned earlier in life?
The Giveaway
I like easy giveaways, so to enter, all you have to do is leave a comment and answer the following:
What financial tip would you share with new graduates?
In addition, for an extra entry, if you have your own site link back to this article. Shoot me an email to make sure I see it.
The giveaway will end May 22 at midnight central time. The winner will be announced on Friday May 23, just before we head out for my cousin’s graduation party.
Leave your financial tip for new graduates below!
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My tip for new graduates would be this: Start saving for your future now! The earlier you start saving the more the wonders of compounding interest will work in your favor!
Pete @ biblemoneymattersMay 9th, 2008 at 8:55 am
My advice to new college grads:
If you have some money to pay down extra on your student loans, you’re actually probably better off investing that money in an index fund. If you can invest money that earns a higher interest rate than what you’re paying on your loans then you are better off doing that vs. paying your student loans down faster.
MattMay 9th, 2008 at 8:59 am
I like Pete’s advice, so my next tip would be to use a credit card (that has rewards) as though it were a debit card, pay it off in full every month, and never have a larger balance on the card than you have in your bank account.
It’ll help build a solid credit history over not having a credit card, you get a tiny benefit by using a card with rewards (I recommend cash rewards) and you set in place a good habit of not spending more money than you have available.
Note that this comes after you’ve put aside some money for savings.
Blaine MooreMay 9th, 2008 at 9:05 am
My tip? Get a part-time job that gives you a regular check, even if you don’t “need” the money and you just do a quick 5 hour a week shift. The years that I had this I was much less likely to blow my money than when I had saved up over the summer/taken out extra on my loans and was using that for spending money. It reminds you just how long you have to work to afford (insert useless college purchase here) so it makes it harder emotionally to blow the money. And if this mind trick doesn’t work, at least then your cover charge for the bar or your cup charge at that keg party will be paid for.
BeccaMay 9th, 2008 at 9:17 am
Let’s see in no particular order…
-Start an emergency fund
-Pay off credit card debt if you have it
-Start a Roth IRA if eligible
-Start a 401K and contribute up to the percentage your employer matches
-Resist the urge to buy a new car if the one you have works
That’s all off the top of my head.
Thrifty FemmeMay 9th, 2008 at 9:39 am
I’d say my best advice would be:
1. Go to College away from your hometown.
PT2. Live on Campus for a while.
3. Get involved.
4. Take your time and enjoy it.
5. Make a ton of friends.
6. Pick a major with instant earning potential.
7. Try your best not to play with credit cards.
8. Take your time.
May 9th, 2008 at 10:10 am
Cut the the credit card if you have one, and start learning how to budget. You can introduce a rewards card back into the mix once you have changed you behavior to live on a lot less than you make.
The Happy RockMay 9th, 2008 at 10:20 am
Bottom line: spend less than you earn, and keep living like a college student for as long as possible. Pay off any debt that you accrued during college.
No Debt PlanMay 9th, 2008 at 10:27 am
Continue living like a student for a while after you get a job. This means that you should not go out and buy the first expensive car you see just because you have a steady paycheck.
Live frugally, only buy things that you need for at least six months and save all you can.
lulugal11May 9th, 2008 at 10:38 am
Coming from a 2006 grad: Live as cheaply as possible and save, save, save. If you can live at home with parents to avoid paying rent do it.
AndrewMay 9th, 2008 at 10:43 am
Going along with what Pete said…
Don’t just start saving for your future now, spend one or two hours looking at what 5 years difference can make on compound interest.
Seeing the difference convinced me to start saving wherever i could for the future.
BradyMay 9th, 2008 at 11:04 am
Remember, jobs are never stable.
ChrisMake as much as you can.
Save/invest more than you think you should.
Live and Love without the uneeded glitz and glam until you can really afford it.
May 9th, 2008 at 11:05 am
Don’t buy a new car!! I made that mistake and “owned” a 35k car making only 45k a year. What a mess that was.
MyMoneyAdventureMay 9th, 2008 at 11:18 am
I would recommend two things:
1. Become an entreprenuer rather then work for “the man”.
2. Start investing in stocks right now. Even if it’s only $10 per month and continue doing it until the day you retire.
JoshuaMay 9th, 2008 at 11:19 am
Advice for grads:
Lance1. Start a retirement plan (the earlier the better)
2. Have some fun! You’re young and have fewer commitments and obligations than you’ll have as you get older. Enjoy this time.
May 9th, 2008 at 11:54 am
I have mixed feelings when I look back 20 years ago. First off, I think it would have been exciting to do something like join the Peace Corps. On the other hand, I was too shy to try something like that all those years ago. Also, I took college courses as a 30-something mother of two so if you’re going to go to college, it may be best to do it while you’re still only have yourself to look after.
Mrs. AccountabilityMay 9th, 2008 at 12:02 pm
My top two tips for new graduates are
1) Start saving for retirement NOW, even if it’s a small amount.
2) Just because you have a new job doesn’t mean you need to start spending more. Try to live a few years as if you were still a student.
Quick Lunar CopMay 9th, 2008 at 12:07 pm
Stay away from debt, of course.
But mostly, never buy a big-ticket item new! Buy a used car, refurbished computer, etc.. They’re as good as new, a lot still have most or all of the warranty, and the price difference is amazing!
Pam DavisMay 9th, 2008 at 12:11 pm
I would recommend starting first with a financial plan that has prioritized goals, projected amount needed, and required savings needed. For example, if you think you’d like to retire at age 45, begin costing how much you think you would need and what you would need to save/invest do to achieve this. The next step would be to determine how to do this (starting with basics such as taking advantage of matching employer contributions, IRAs, etc. to get started and forego “analysis paralysis”) Defining priorities will help as it will be difficult for most people to pay down debt, meet retirement goals, save for a home, etc. at the same time.
Naturally, goals change over time as you graduate from college but it is so much easier to refine a plan than act blindly.
AshleyMay 9th, 2008 at 12:44 pm
I’m not a college graduate yet, but one piece of advice I’m glad I was given as a high school graduate is to always have an emergency fund. I’ve seen several of my college classmates struggling when something unexpected happens, even if it’s a relatively small thing.
NicoleMay 9th, 2008 at 12:49 pm
Everyone has pretty much said it all.
I would suggest a new grad to continue living the same struggling student lifestyle and invest as much as possible to a RothIRA and 401k plan in that order since these might be the lowest wage years in their entire work life and they may not be married yet (which gives tax advantages) and buy minimum car
sueMay 9th, 2008 at 1:07 pm
Don’t throw money out the window on rent! Save up a down payment for something small (for example, a one bedroom condo) and gradually upgrade every few years as your earnings and your equity increase.
Frugal ParentMay 9th, 2008 at 1:41 pm
If you don’t pay attention, the outlay for pleasures such as a night out can run up much faster than you realize.
Not to mention the cost of a DUI ticket.
gS49May 9th, 2008 at 1:51 pm
Don’t be conservative with your investments. Time is the great equalizer when it comes to the market.. and you have the time to be aggressive.
JeremyMay 9th, 2008 at 2:07 pm
Don’t get a credit card right away-wait until you are actually earning money and understand the logistics of a card!! Can you tell I’ve had experience with this
BethMay 9th, 2008 at 3:18 pm
My advice would be: Don’t rush… take your time to live your life a little before you really settle and work: travel, know people, learn about other cultures, broaden your minds, because life experiences are the only thing that are going to keep with us, no matter how old you get
RafaelMay 9th, 2008 at 3:18 pm
As boring as it is, my one piece of advice would be to live below your means. Whether you make $20,000 or $100,000 per year, you’ll never get ahead financially if you spend all of it.
Chief Family OfficerMay 9th, 2008 at 3:22 pm
There is still a lot to learn out there. Graduation is not the end of learning but just the beginning. Learn to handle finances is one example. Just continue learning and apply what you learn to live a happy life.
ArnoldMay 9th, 2008 at 3:46 pm
My advice would be to come up with a budget right away. Then track your spending for three months or so to get a feel for what you really spend.
TonyaAt this point look at how you are spending your money, does it fit with your financial plans? Adjust accordingly, look for ways to save money by being clear about the difference between a want and a need.
At this point redo your budget making sure that you are investing in your future and saving for emergencies.
May 9th, 2008 at 3:52 pm
As soon as you get a job, open a savings account and ROTH IRA account.
unimaxMay 9th, 2008 at 5:31 pm
My advice to new graduates: Buy and read The Automatic Millionaire by David Bach. It changed my life.
MITBeta @ Don't Feed The AlligatorsMay 9th, 2008 at 7:59 pm
Contribute 10% or more to your 401k the first day on the job. You’ve just come from living based on just scraping by. So you should be able to find a happy medium between “poor college student” and “I’ve got a job and I’m going to live like a king”. Then save half of all raises, bonuses and financial windfalls until you can max out your company 401k and contribute the max to an IRA.
ToddMay 9th, 2008 at 8:22 pm
Cool, I love shopping at Amazon.com!
My tip - As soon as you get your first job, establish the habit of saving 10% and giving away 10% before you do anything else with your money.
EdenMay 9th, 2008 at 10:11 pm
fresh graduates advice:
buy PROBLOGGER BOOK, that author by DARREN ROWSE AND CHRIS GARRETT.
start blogging now and start making 6- figures income.
this is not quick-rich scheme.. you need at least 2years of blogging to build up your reputation with blog world.
then, start earn residual income with only using blog.
p/s: i’m fresh graduate too. today, i’m received THE 4-HOUR WORKWEEK; AUTHOR BY Timothy Ferriss.
i need these $50 because im looking to get free PROBLOGGER BOOK.
and because i love contest and free give…
balootismeMay 10th, 2008 at 8:51 am
My advice to new graduates: Choose the job that offers the most professional opportunity, not the job offer with the highest paycheck. The money will follow.
PatrickMay 10th, 2008 at 9:43 pm
Stay away from credit cards! I remember when I got my first credit card bill. I’d charged something like $500.00 on it and the minimum payment was around $15.00.
I thought, “Wow, I can buy $500 worth of stuff and only pay $15. How great is that?!” WRONG!
I don’t know how much the bill actually cost me when all was said and done because I’m not done … I’m still paying the stupid thing off. Oh, and the purchase? A briefcase long since unused by someone I don’t even see anymore.
Make a budget and pay cash … repeat forever.
KathrynMay 10th, 2008 at 10:30 pm
My advice would be:
1) set up a budget with savings at the top of the list - you’ll have no idea how much you can really afford to spend on “luxuries” like clothes, going out, eating out, etc. if you don’t list out your monthly expenses (fixed and variable), including savings, first
and
2) keep fixed expenses as low as possible (i.e. rent, transportation) - it really does help to live like a student for a while longer
The Simplest PleasuresMay 11th, 2008 at 1:29 pm
I would tell college grads to go easy with using their credit card because many max out their credit cards by purchasing interview outfits and new furniture for their new places.
For interviews, they should have a regular priced suit and simple accessories.
For new apartment dwellers, look to friends/family and craigslist to furnish your apartment cheaply. You can always replace the second hand stuff with Crate and Barrel, West Elm and Pottery Barn items when you earn the money.
MarleneMay 11th, 2008 at 4:07 pm