Teaching Graduates About Money
Lessons New College Grads Can Learn Before Entering the Workplace
Gifts of cash will be coming soon for new graduates. What to do with that money and how to start spending wisely.
After the final exams and graduation parties are over, real-life lessons begin…Ones you won’t learn from a textbook.
How Graduates Can Start Spending and Saving Wisely:
- Don’t blow your monetary gifts. Got a bunch of cash from friends and relatives? It’s easy to spend it on clothes, furniture, or a big screen TV. But resist that urge. Instead put the money in a CD or money market account. Better yet, start an IRA. Or if you have a job already, contribute to your company’s 401K plan. If you spend your money on "stuff" the newness will fade, and you’ll be left with…well nothing that will ultimately last. By saving your money, you can watch it grow, and eventually use it to for a down payment on a home.
- Exchange your gift cards for cash. Several web sites will give you money for your gift cards. You may not receive the same dollar value of the card, but you can take the cash and pay off debt. Or save the gift cards and use them during the holidays to buy presents for family members; or simply re-gift them. Your relatives won’t know and even if they do, they will understand you are a poor recent graduate!
- Pay off your credit cards immediately. The best gift you can give yourself is to start your career debt-free. Think of it as an investment that yields an 18 percent return. That’s how much you’ll save by paying off that expensive credit card debt.
- Get a roommate. After four years of living with other people in cramped quarters, you might feel the need to strike out on your own and live by yourself. That’s a noble idea, but with rent prices still out of reach in many areas, you can cut costs in half by living with someone. If that’s not an option, many young adults are choosing to move home with Mom and Dad for a short time.
- Set aside 10-20 percent of your salary for savings. Don’t even think about cashing your first paycheck until you set up a direct deposit each month into a savings or money market account. If you don’t know the money is there, you won’t spend it!
- Cut back on going out. With your first taste of real adult freedom, you might be tempted to live it up by going out to eat a lot and becoming a regular at Friday night happy hour. Those little indulgences will cost you big. Instead, meet friends at a coffee bar or play tennis at a neighborhood park. You’ll be healthier, both physically and financially.
The copyright of the article Teaching Graduates About Money in Consumer Education is owned by L. Marie Dubuque. Permission to republish Teaching Graduates About Money must be granted by the author in writing.
