As 1.855 million students graduate from college this year with a bachelor’s degree, according to the National Center for Education Statistics, they will enter the workforce armed with knowledge from the past four years. Since financial planning, investments and savings isn’t always included in the college curriculum, Busey is here to help with the best and worst financial advice for the new college graduate in your life.
Worst Financial Advice
Let’s outline money moves that can hurt you financially. Experts recommend avoid taking on too much debt, falling into bad money habits and waiting to save and invest.
From a new car to a flat-screen TV, post-graduation overspending is tempting when you're working full time—but you should avoid taking on too much debt. Debt should not exceed 20 percent of your take home pay each month. Complete this helpful worksheet from the University of Illinois Extension for a true picture of your debt level.
Avoid falling into bad money habits—like morning mochas, daily lunches and happy hours. If you repeatedly waste money now, it will cost you for years. Psychologist Dr. Roy Baumeister from Florida State University says there’s no single effective way to break bad habits, but one approach is to become more aware and develop strategies to counteract them.
Too many college graduates are waiting to save and invest—letting valuable time slip by. You should work towards achieving your long-term financial goals, like retirement and homeownership, sooner rather than later. “It’s important to remain goal oriented and get accustomed to holding yourself accountable to financial goals by reviewing them periodically,” says Kevan Melchiorre, Vice President & Director of Private Wealth Advisory for Busey Wealth Management. To get a picture of how much you could save over time, calculate your savings.
Best Financial Advice
To improve your financial situation, learn to live within your means, respect the power of compounding and advocate for your own financial security.
Avoid going deep in debt—learn to live within your means through planning and discipline. First, create a budget by examining your income and expenditures. Next, figure out where you can spend less in order to achieve your financial goals.
Respect the power of compounding—and save, save, save. When you open a retirement account—such as a 401(k), Traditional IRA or Roth IRA - you benefit from compound interest. These accounts are actively invested and have the potential to make the most benefit.
Whether at work or at home, advocate for your own financial security—by better managing your money and making informed financial choices. Don’t rely on someone else or others to do it for you.
Give the gift of sound financial advice for the graduate in your life with Busey. Visit one of our many convenient locations, call 1.800.67 | Busey or visit busey.com for solutions to your personal, business and wealth management needs.
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This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Busey Investment Services and not necessarily those of Raymond James. The information has been obtained from sources conserved to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete.
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