College seniors who are graduating this spring may still have a lot to learn about managing their personal finances, especially during the first few years out of school – a period that can significantly impact your financial future. This U.S. News article by Geoff Williams offers some valuable advice from financial experts to help make your post-college life a lot easier.
That first job: It isn’t only about your salary. When you’re looking for your first post-college job and hoping it helps advance your career, remember to think beyond the numbers on the paycheck, advises Kristen Robinson, a Boston-based senior vice president at Fidelity Investments whose specialty is helping women and young investors.
“While it may seem natural to focus on just the salary, remember there’s more to evaluate when thinking about a job’s total financial compensation,” Robinson says, adding that you should look at whether you’re getting medical and retirement savings benefits that might make a difference to your bottom line if the actual money you’re getting every week seems paltry.
She cites a Fidelity Investment study finding that 76 percent of millennials relocate for a new job. “Cost of living and taxes should be top of mind when evaluating a job, as they can vary dramatically across the country,” she says.
In other words, you could be fooled into thinking you have a fat salary or end up turning down a well-compensated job if you haven’t factored in the benefits, cost of living or taxes.
Start saving for retirement immediately. You may decide it’s not feasible to enjoy the retirement benefits your company is offering if you suspect you won’t be there long. But if the offer is there, take advantage of it anyway, says Lucas Casarez, a wealth advisor at Keystone Financial Services in Loveland, Colorado.
Be cautious about accruing credit card debt. Yes, you’ve heard that before, especially growing up in the recession. Yet it’s so easy to forget when you’re on your own, eating ramen noodles and sitting in a lawn chair in your studio apartment. But when you hear your inner voice urging you to splurge on some new furniture, instead listen to Paul Kuzmickas, a bankruptcy attorney in Cleveland, Ohio.
Many of his clients are recent college graduates who don’t think about the long-term consequences of having too much credit card debt.
“Credit card purchases I often see include the latest smartphones, expensive laptops or paying for vacations without realizing how quickly credit card debt and the resulting interest can add up,” Kuzmickas says.
None of this means you shouldn’t use a credit card. “Some debt can be beneficial,” Kuzmickas says, referring to how a solid credit history will someday allow you to get a low-interest loan for something like a car or house.
But pay off your debts quickly, he urges.
Create a budget. This is probably the most important advice you can take, and probably the easiest to ignore if you don’t get into the habit of not just creating a budget, but following and continually updating it.
“Yes it’s cliché, but it’s imperative,” says Erin Ellis, an accredited financial counselor at Philadelphia Federal Credit Union. “For many college grads, this can be the first time they’re experiencing life with a disposable income. Don’t let that throw you off course.”
