Congratulations! You’re done with college and are now ready to finally start pursuing your career. Unfortunately the vast majority of American graduates make the same mistakes after graduating. Here’s 7 mistakes you need to avoid and start off on the right track.
1. Taking on too much debt, but you still need some: You may have student loans or lucky and not have any. If this is the case then your credit score will be abysmal. It takes time to build this and can be done through everything from credit cards, auto loans and utility bills. However, DO NOT go and borrow money just so that you can build your credit score. Be patient, it will happen in time.
2. Mo’ money, mo’ problems: Some of you will continue to struggle and won’t see a difference from the college lifestyle. Other’s will start out making so much they won’t know how to spend it all. This temptation needs to be curbed because it cause you millions of dollars by the time you retire if it’s not setup properly. If you find yourself flush after college then, immediately use that extra money to build an emergency fund, start saving for retirement and pay down debt as fast as possible.
3. Falling into bad money habits: Biweekly $20 happy hours, daily $15 lunches and nightly take-out are just a few of the bad habits that eat into new grads' bank accounts. While the occasional lapse isn't a problem, repeatedly wasting money on a weekly basis for years will cost you, big time. Bag your lunch for work, quit smoking and don’t run up any $200 bar tabs at 5th Street while your friends are in town!
4. Waiting to save and invest: The absolute first thing that you need to do is max out your employer sponsored retirement plan. Some make you wait a year while other only 6 months depending upon when you get hired. But this is crucial to retiring early and due to the tax rate $1 put won’t decrease your paycheck by $1. If you find this to be completely impossible then at least put away enough for your employer retirement match.
5. Failing to negotiate for a higher salary: Beggars can’t be choosers, but they can try. Don’t be afraid to try to negotiate for a higher salary right out of the gate. The worst that they’ll tell you is no. Don’t be greedy, but even an extra 5% could be enough to pay all your utilities each month.
6. Thinking you're done studying: You may be as smart as they come and sick of school, but everybody needs to know personal finance because it touches every aspect of your life. Make the goal of learning a little bit about it each day. This should cover all aspects: tax, investments, estate planning, retirement, college savings for your children.
7. Getting buried in paperwork: The amount of financial paperwork that you will be inundated with will be overwhelming at first. Get organized from the start. File away your paychecks, tax returns and financial statements. Anything that can be thrown away needs to be shredded first to help avoid identity theft.
Here’s a great article on how to save a third of your income…
http://money.usnews.com/money/blogs/alpha-consumer/2010/11/02/how-to-save-one-third-of-your-income-
1. Taking on too much debt, but you still need some: You may have student loans or lucky and not have any. If this is the case then your credit score will be abysmal. It takes time to build this and can be done through everything from credit cards, auto loans and utility bills. However, DO NOT go and borrow money just so that you can build your credit score. Be patient, it will happen in time.
2. Mo’ money, mo’ problems: Some of you will continue to struggle and won’t see a difference from the college lifestyle. Other’s will start out making so much they won’t know how to spend it all. This temptation needs to be curbed because it cause you millions of dollars by the time you retire if it’s not setup properly. If you find yourself flush after college then, immediately use that extra money to build an emergency fund, start saving for retirement and pay down debt as fast as possible.
3. Falling into bad money habits: Biweekly $20 happy hours, daily $15 lunches and nightly take-out are just a few of the bad habits that eat into new grads' bank accounts. While the occasional lapse isn't a problem, repeatedly wasting money on a weekly basis for years will cost you, big time. Bag your lunch for work, quit smoking and don’t run up any $200 bar tabs at 5th Street while your friends are in town!
4. Waiting to save and invest: The absolute first thing that you need to do is max out your employer sponsored retirement plan. Some make you wait a year while other only 6 months depending upon when you get hired. But this is crucial to retiring early and due to the tax rate $1 put won’t decrease your paycheck by $1. If you find this to be completely impossible then at least put away enough for your employer retirement match.
5. Failing to negotiate for a higher salary: Beggars can’t be choosers, but they can try. Don’t be afraid to try to negotiate for a higher salary right out of the gate. The worst that they’ll tell you is no. Don’t be greedy, but even an extra 5% could be enough to pay all your utilities each month.
6. Thinking you're done studying: You may be as smart as they come and sick of school, but everybody needs to know personal finance because it touches every aspect of your life. Make the goal of learning a little bit about it each day. This should cover all aspects: tax, investments, estate planning, retirement, college savings for your children.
7. Getting buried in paperwork: The amount of financial paperwork that you will be inundated with will be overwhelming at first. Get organized from the start. File away your paychecks, tax returns and financial statements. Anything that can be thrown away needs to be shredded first to help avoid identity theft.
Here’s a great article on how to save a third of your income…
http://money.usnews.com/money/blogs/alpha-consumer/2010/11/02/how-to-save-one-third-of-your-income-
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