Money tips for new college grads usually focus on student debt and credit cards, but you need life-long financial wisdom to manage your money after college. Student loan debt and credit card debt are temporary problems – budgeting, saving, and preparing for retirement are ongoing issues for any college grad. Try these truly great money tips for new college grads to get going on your personal path to wealth.
1. Learn to say “Not right now”
The basic point of smart financial management is to learn to say no to things that don’t matter so that you will have the money for things that do. This is the key principle of any budget – prioritizing your spending. You want to make sure that essentials and value purchases get priority over beer, iTunes impulse buys, and shopping splurges. It’s not that you can’t or shouldn’t have those things, it’s just that you’ll be a lot better off financially in the long run if you ditch the “must-buy-now” mindset. If you can say “Not right now” to limited time only special offers, promos, and your own impulses, you will shop smarter and have more money in your pocket every month. This will help you separate yourself from other new college grads who blow their paychecks without thinking and get trapped in a life of overspending.
2. Get going with savings
Save money. It’s not rocket science, but this great money tip will give you a lifetime of wealth if you stick to a solid savings plan.
One very easy plan is to put 10% of every dollar that crosses your palm into savings. George S. Clason described this plan in his book, The Richest Man in Babylon, as being the one thing that would ensure you didn’t spend your life wondering where all the money went. Even if you are broke, practice this habit. Clason used case study after case study to show that this method didn’t make the poor feel poorer. Instead, it created a store of wealth that could be used for emergencies or investments to grow more wealth. Saving like this will also give you the peace of mind to know that you have something set by that is yours for those “just in case” situations. As a final bonus, the discipline you develop with regular saving will help you with your budget, your debt, and your retirement funds.
3. Plan for retirement
You just got out of college – who has time to be thinking of retirement? That should be you, dear reader, unless you plan to work until you die. Having a nice retirement is much easier when you start to plan for it young. Make the choice to open a retirement account and pursue a lifestyle of freedom in your old age.
Set up a self-directed IRA or Roth IRA. You don’t need an employer to have a retirement account, and with today’s economy, it’s best not to plan for a corporate 401(k) to take care of you. With your own retirement account you can contribute regularly and manage your own money. Self-directed retirement accounts can be opened online and give you tax savings by allowing you to deduct many of your contributions. This will help you be wealthier throughout your life and confident that something is waiting for you when you stop working.
Money tips for new college grads don’t have to be all about debt. You can have a life of abundance if you choose to follow great money tips for ongoing financial management. Learn to say no and stick to your budget priorities, practice smart saving, and plan for retirement. If you can do these three things, you will find that life after college doesn’t have to be a debt-filled financial nightmare. You can do better, and you will!