June is graduation season, and for those who are moving on to higher education or entering the workforce for the first time, it is important to carry the timeless wisdom that comes from beyond the textbooks. Moreover, we could all use some reminders of the lessons that we sometimes overlook in our finances. Here are four:
1. Start saving for retirement as soon as you possibly can.
Many jobs today offer retirement savings plans, such as 401(k)s. Employers will often match a percentage of the contributions that you make, so you have an immediate multiplier just by putting money into the plan. Don’t ignore this opportunity, regardless of your stage of planning.
2. Piling up debt really hurts.
Especially for the college graduates with student loans, but even for those who have excessive mortgages and big credit card bills, having debt is a huge burden. Work to eliminate the high-interest debts, and if you cannot afford something, then do not go deep into debt to buy it. If you want something that is nicer, save for it now and let interest work to your advantage instead of against you.
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3. A little self-control goes a long way.
Do you really need those luxurious things that you see in the media and in the stores? A good policy is to wait for three weeks after you think that you need something that you want. If your feelings change and make you look at something else, then start the clock again. Another idea is to count out the cash on a table for what you want to buy instead of running to the credit card. The more expensive the item, the more cash you will see on the table. You may change your mind after seeing the money in that way.
4. The future is closer than you think.
You may be reading this letter as a recent graduate, or you may read it wondering where all the years went since you graduated. If you are trying to find a job, make connections, learn a skill/language, save money, reduce debt or complete a big project, regardless of how hard the task may appear, do it now. The last thing you want is to find your future as a series of missed opportunities and closed doors, so empower yourself today.
Did you know? Now could be a great time to find out your credit score and see your credit report, especially if you are moving into a new place or on your own for the first time. The earlier that you can find out if there are errors, excess credit card applications, late payments or other issues, the quicker you can work to repair them.
This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.
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