If you or someone you know could use a little help in the financial planning department, check out these tips from Forbes Magazine Contributor, Kerry Hannon.
Upon graduation from college, most students have worked a few part-time or summer jobs to earn some extra cash. But when they graduate, it becomes more of a responsibility to work full-time and budget all earnings.
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These tips from Kerry Hannon, a Forbes Magazine Contributor, provide a basis for college graduates on what to do with their finances:
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Read a book on money basics.
Hannon recommends books written specifically for young adult audiences.
Make a tentative budget.
Be cautious of your activities – eating out, shopping, overbuying products, etc.
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Look for free rent.
Hannon says that living with one’s parents can cut back enormously on costs. Plus, it allows one to save more money.
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Stay away from debt.
Hannon advises that “Debt is a dream killer.”
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Get rid of debt quickly.
Hannon believes in thinking of debt as your worst enemy.
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Start an emergency fund.
This is a TOP priority. Set aside a certain amount of income each month, and don’t touch the stash until you’ve built it up to at least 6 months worth of living expenses.
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Buy stocks, and let your money grow. Don’t move it around too soon.
Take advantage of retirement plans.
Employers will offer such programs to you as an employee, it is important to understand and utilize them.
Don’t use your 401k too soon.
Let the money values build over time, you’ll need it once you retire.
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Take health insurance when it’s offered to you.
Just because you’re young does not mean you won’t need health insurance. Take advantage of the offer when it’s presented to you.
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Splurge on life experiences.
Hannon says that trips or once-in-a-lifetime opportunities are worth the cost.