Tis the season for hugging, cheering, celebrating, high-fiving, and family photos that never seem to end. That’s right …it’s graduation season!
As you don your cap and gown this spring, take a minute to embrace your loved ones, celebrate your accomplishments, and mindfully contemplate all that is to come. Some of your best days are ahead and we couldn’t be more proud of you!
That said, we also know that these days are ripe with opportunity – particularly, the opportunity to start anew and begin taking measures towards the “rest of your life”. So, when you find a calm moment amidst all of the exciting chaos in the next few weeks, take some time to create a plan for your finances. The best days may be ahead for you, and you have a unique chance at this stage of your life to make decisions that can give you a significant advantage in the years to come.
Not sure how to get started? We’ve outlined our top five tips for you, our college grads, below:
1. Build your credit
If you haven’t yet made a big purchase in your life (think: bought or leased a car, purchased a home, secured lending for a business endeavor, etc.), it’s quite possible you will need to do so at some point in the future. Credit scores impact nearly every large purchase you make. The best thing you can do now to prepare accordingly is to build your credit history. Create a financial folder or binder and begin using it to organize all of your financial statements. Then, ensure you consistently pay all of your bills on time and keep that credit card usage to a minimum. Your credit score can be negatively impacted if you miss a payment, default on a loan, or use your credit card to afford your lifestyle. To avoid the headaches that can come from those actions, aim to keep your debt utilization ratio at or below 30% (meaning: use only about 30% of your permitted credit limit), and put a plan in place to always make your minimum monthly payments.
2. Start budgeting
These days, technology and various apps make it incredibly easy to track your spending and implement a budget. Sure, establishing this habit may take some getting used to, but taking the time to really get to know your spending habits and set goals for yourself can help you truly build financial confidence. If you’re not sure where to start, check out our online course: Budgeting for Boss Babes!
3. Pay yourself first
It may seem crazy to focus on saving for your retirement just as you begin your career, but trust us, time has this amazing way of moving all too quickly. Before you know it, you’ll blink and suddenly find yourself several years older and (hopefully!) wiser. Don’t let those years pass without investing in your retirement through participating in your employer’s 401(k) plan and/or opening up a separate retirement account such as a Traditional or Roth IRA. The concept of paying yourself is so important. You’ll be tempted by many things as you begin to earn and make a living, but don’t forget to pay yourself in the process by investing in your retirement. Your future self will be SO glad you did!
4. Gather experiences, not things
Don’t be so busy gathering trinkets or trying to chase that perfect photo for social media that you miss out on what’s really right in front of you. By focusing on building a life rich with experiences and true friendships, you’ll find that you’ll actually be more fulfilled and perhaps be a bit better off financially as well!
5. Be yourself.
Throughout your transition into the “real world”, you may find yourself feeling disappointed or suffering from the effect of trying to “keep up with the Joneses”. During these difficult times, it will be important to reconnect with who you really are and remember that most social media applications only feature photos from folks when they’ve got something positive to share. Remember, no one likes to post when they’re feeling down or are having a particularly tough day. Don’t compare yourself to the highlight reel of glamorous posts on your newsfeed. Instead, take ownership of your financial health so that you, too, can be in a better position in the years to come.
myneedtolive guest blogger
Brittan Leiser is a Financial Advisor in Cleveland, Ohio. Brittan created AdvisHER after recognizing that in the male dominated financial industry, women often felt ignored or overwhelmed when it came to having a conversation about their own personal finances. A graduate of the University of Notre Dame’s Mendoza College of Business, Brittan is passionate about helping clients understand their financial options in order to achieve their true potential.