A Graduate’s Guide To A Solid Financial Future

When you were in college, finding a medium between your academic and social life was a balancing act. Not only because you needed to make time to study, but because hanging out with your friends almost always translated into spending money you may not have necessarily had.

Now you may find yourself with some debt, due to your student loans…and maybe a little bit of “misusing” that credit card you swore you’d only take out of your wallet for emergencies. To be clear, not all credit card debt is bad. It’s a good idea to have a credit card to use either for emergencies or to fill up your gas tank every month. This will ensure your credit gets a “good rap”, and you’ll be able to apply for more credit sometime down the road.

Putting Away Cash for Your Golden Years
Although planning for retirement is probably the furthest thing from a recent college graduate’s mind, it’s the best time to start doing so – for many reasons. One of the big ones is that your $30,000 student loan is simply not going to go away, so you have to make plans as to how go about paying it off while also saving a bit of cash.

While everyone’s financial situation is different, there are certain steps you can take to make sure you are putting away some money for your future as well as creating healthy spending habits that you can benefit from in the long run.

  1. Make sure you make a budget for yourself. Allow for things like entertainment, but more importantly for emergencies like doctor’s visits or car repairs.
  2. Just like a person who is looking to lose weight, you have to consume or spend less than what you make every month. Otherwise you’ll over-extend yourself and find your financial house in real trouble.
  3. Pay off any credit card debt you may have accrued during the month. If you cannot pay back the entire amount, try to pay more than the minimum amount required. You will simply be spinning your wheels if you don’t.
  4. Speaking of bills; pay all your bills on time. Late payments reflect badly on your credit score and will eventually hurt your chances of getting more credit in case you need it.
  5. If you happen to work at a company where they offer a 401k plan, open one and contribute as much as your budget will allow. Some companies will match employees’ contributions up to a certain amount.
  6. Open a Roth IRA (Individual Retirement Account). If you’ve maxed your contribution to your employer’s match, open a Roth IRA. It will grow tax-free, and remain untaxed when you withdraw it years down the road.

 
These are all simple things you can do to improve your future, and while you may think you have nothing to worry about because you’re just getting started, think about this; the earlier you start the more prepared you’ll be. This means that you’ll be able to enjoy that summer home in your golden years instead of spending it in a retirement home.

Image Credit: Will Folsom via Flickr.com

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