It’s that special time of year, where summer is coming to a close and the school bells are ringing. Every year, the National Center for Educational Statistics, approximates that over 4,000,000 college degrees are conferred in the United States each year. One thing a university does not teach their students are financial hacks for recent college graduates. Maybe the university should teach this course as an elective.
The first thing a recent college graduate should consider is creating a simple budget. Organize your monthly expenses into different categories like rent, food, entertainment and even college debt. You want to make sure your necessities are paid first before you splurge on travel or even expensive avocado toast.
With a monthly budget put together, shift your focus on paying down your student loans. Make sure you know how to find your student loan lender, what your interest rate is and how much money you owe on your loan(s). Do not get behind on your monthly payments because the interest will keep accruing and you are not able to declare bankruptcy with student loan debt.
Lastly but not least important, establish a retirement plan where you can save money for your future retirement needs. Check to see if your employer has an established 401(k) and see how much they match your contributions. A rule of thumb with 401(k)s is to contribute at least the full match of the employer, after all it’s free money for you. If your employer does not have a 401(k), you are still able to invest in an Individual Retirement Account (IRA) or a Roth IRA. For example, if your company matches 4% then you should invest 4% to get the full match.
Branden has been a key member of the Independent Financial Services (IFS) team since 2013. He is a Financial Advisor, Portfolio Technician, Certified Financial Planner, and Accredited Asset Management Specialist. Branden’s professional registrations include the Series 7, Series 66 as well as Florida Life, Health and Variable Annuity insurance licenses. As a Financial Advisor, Branden develops financial plans for clients which includes creating and modeling different possible financial scenarios, preparing client reports along with providing key recommendations for helping clients achieve their financial goals.
401(k) plans are long-term retirement savings vehicles. Withdrawal of pre-tax contributions and/or earnings will be subject to ordinary income tax and, if taken prior to age 59 1/2, may be subject to a 10% federal tax penalty.