College grads’ new homework: Financial intelligence
Vail, CO, Colorado
It’s that time of year when students from across the country graduate from college. If you’re one of them, you’ll have to do your homework on a very important topic: your financial situation. It’s one subject in which you’ll definitely want to earn a passing grade.
Of course, if you’re like many recent graduates, the financial issue that might weigh heaviest on your mind is your student loans. To help pay for college, about two out of three students take out loans, with the average debt amounting to more than $19,000, according to figures from the U.S. Department of Education.
Whatever the amount you have borrowed, you will need to make arrangements to pay for it. If your loans aren’t too large, your monthly payments may not be overly burdensome, but, in any case, it’s a very good idea to stay current on your payment schedule ” falling behind can lead to big problems down the line.
Apart from paying back your loan, though, you’ll have other financial considerations upon graduating college. Unless you plan to attend graduate school, you might be starting a full-time job, which means you’ll have to quickly learn some money-management skills ” and one of the most important of these skills is budgeting. At this stage of your life, you may not have a lot of disposable income ” especially after paying for rent, which will probably take up a sizable portion of your paycheck ” so you’ll want to track your expenses and be as thrifty as possible.
Still, while you’re thinking about today, you’ll want to plan for tomorrow. If you want to save for a car or, perhaps later down the line, a house, you’ll want to get in the habit of investing something on a regular basis. Even if you can just put away $50 or $75 per month at first, you’ll see some accumulation after several months. Just as important, you’ll get in the “savings habit,” which, if continued throughout your working life, can pay off for you in many ways.
If you don’t know how you should invest your money, consult with a financial adviser ” and don’t be deterred from seeking out professional help because you’re “only a small investor.” Many qualified financial advisors will be more than willing to meet with you and help you.
You might also get some investing help, in a way, from your employer. If you’ve landed a job with a company that offers a retirement plan, such as a 401(k), take advantage of it. While retirement may be far from your mind at the moment, an employer-sponsored retirement plan offers the chance to invest on a tax-deferred basis, which means your money will grow faster than it would if you invested it in an account in which you paid taxes every year.
So put away what you can afford and increase your contributions as your salary rises over time.
By following these suggestions, you can start your life in the working world with a solid grasp on your finances ” and that’s a grip you won’t dwant to relinquish.
Charlie Wick, Tina DeWitt, and Todd DeJong are financial advisers with Edward Jones Investments. They can be reached in Eagle at 328-4959, in Edwards at 926-1728, and in Avon at 845-1025.
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