This time of year can only mean one thing: a new wave of students is donning their caps and gowns and walking across a stage to finally accept their hard-earned college diplomas. It’s a really exciting time in anyone’s life — but it can be pretty scary, too.
For recent grads — and even members of Gen Y who have been out of college for a few years — thinking about how they’ll become financially independent from their families and start to take care of themselves in the real world can be intimidating. But with the right advice and financial knowledge, managing your money when you’re still young and figuring things out doesn’t have to be impossible.
Recently, I went on Wisconsin Public Radio’s On Your Money to talk about Financial Tips for New College Grads. There are four major steps recent grads and Millennials just starting out can take in order to maintain good financial health:
- Avoid credit card debt
- Build your emergency savings
- Plan to pay off your student loans
- Take advantage of your company benefits
Here are four more ways Gen Y can maintain good financial health:
- Earn a little extra income on the side. I know it may seem totally overwhelming to be thinking about starting a career and maintaining a part time job or side gig, but it’s well worth considering. Imagine how much faster you’ll be able to reach big financial goals, like paying off student loans and saving for your future, if you had some extra cash available each and every month!
- Get your financial life, from expenses to savings to goals, organized so you know what’s going on. It’s hard to build a budget if you can’t track what your money is actually doing, and it’s even harder to maintain good financial health when you have no idea what the big picture looks like. Take the time to get organized, and then stay that way. It really makes a difference when you’re trying to build your wealth.
- Be proactive and start saving for retirement. For Gen Y, retirement can seem like a million years away. But your biggest investment advantage is time, so don’t squander it! Even if it’s just $100, $50, or $10 a month, a little bit seriously adds up when you start young. Make your savings automatic, so you won’t even need to do anything to maintain this aspect of your good financial health.
- Make sure your spending aligns with your values. The best lesson you can learn fast is that material goods aren’t going to fulfill you or bring you true happiness. You should prioritize your spending so that the important things are always taken care of: your needs, present and future, and the people you care about most. Put relationships and experiences before acquiring more material possessions. This is what it means to align your spending with your values.
Even though you may feel like you’re not sure where to start, there are plenty of places to turn for help, advice, and guidance. Plus, you don’t have to have it all figured out right away. What’s more important for recent grads — and for Gen Y in general — is to be proactive about financial matters. Keep learning, keep asking questions, and keep making smart decisions that will help you maintain your good financial health.