Graduation is around the corner. If you are looking for a job or getting ready to start a new job, reality will soon set in that Mom and Dad aren’t paying the bills any longer. Take heed of these few money messages and before you know it, your bank balance will be in the triple and quadruple digits. Plus, you will be setting the groundwork for healthy financial habits for the rest of your days.
1) No matter how little you are earning, setup an automatic transfer from your checking account to a savings account. Even if it is only $25 a month, just doing that amount at age 22, will get you nearly $61,000 by age 65. Check out the Orange Savings Account at ING DIRECT or American Dream Savings Account at EmigrantDirect for a higher interest rate than your local bank.
2) Take a class or read a book. You might not have majored in Finance in college, but learning the fundamentals of mutual funds or ABCs of IRAs and 401(k)’s is essential to passing your real life exams. Sign up for a personal finance or financial planning class at your local community college or continuing education program. You can also buy a personal finance book with a friend and get together at your local watering hole to discuss it.
3) Pass on the plastic. You might have become reliant on it to pay for books or even spring break but get serious now and live within the bounty of your new salary. If you can’t pay off your balance every month, then don’t use your card. As simple as that. If you are starting off with a credit card balance, come up with a plan to aggressively pay off your debt.
4) Sign up for your 401(k). You might not think you can afford it but you will not even miss the money after the first few weeks. Make sure you contribute enough so your company matches. If your company doesn’t offer a 401(k), then open a ROTH IRA at a no-load mutual fund company such as Fidelity or Vanguard. Make your contributions automatic as well.
Check out “MY MONEY MATTERS” kit.
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