|
It's
that time of year when students from
across the country graduate from
college. If you're one of them, you'll
be anticipating a new chapter in your
life. And that means 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're going to graduate
school, you might be starting at a
full-time job, which means you'll have
to quickly learn some money-management
skills. 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 carefully 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 may see some
accumulation after several months. And
just as importantly, you'll get in the
savings habit, which, if continued
throughout your working life, can pay
off for you in many ways. Dollar cost
averaging does not guarantee a profit,
nor does it protect against a loss in a
declining market. You should always
consider your financial ability to
continue investing through periods of
low-price levels. If you don't know how
you should invest your money, consult
with a financial advisor - and don't be
deterred from seeking out professional
help because you're "only" a "small"
investor. Many highly qualified
financial advisors will be more than
willing to meet with you and help you
out - you just have to find someone
who's right for 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 quite 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 on an account in which
you paid taxes every year. So, put away
what you can afford - at least enough to
earn your employer's matching
contribution, if one is offered - 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. |
