ROCHESTER, N.Y. (WROC) — Certified Public Accountant Dave Young—from the New York State Society of CPAs—is offering up real-world financial lessons for 2021 graduates. “How graduates approach financial planning in the first few years after college can set the tone for their financial habits down the road,” said Young.
Plan to save
- Have a monthly budget and stick to it.
- Account for student loan repayment.
- Have an emergency fund of at least three to six months of monthly expenses.
- Separate the needs and wants.
Money spent is money lost
- Start saving early in your 401(k) / 403(b) if possible also start funding a Roth IRA.
- Oftentimes your employer will match your contributions.
- Saving early and regularly is a key factor to financial security in your retirement years.
Control debt before it controls you
- Don’t go into debt too quickly.
- You don’t need an expensive brand new car – a good used car will do.
- You need to make sure you pay off your credit card bill each month in full.
- You don’t need to purchase a house immediately
Become a good credit risk
- Make sure you pay all your bills on time and in full.
- Monitor your credit reports.
- Protect your personal identifiable information (PII)
Face facts about insurance
- Review your insurance – you may not fall under your parents’ policies once you graduate.
- Make sure you have health insurance.
- Consider a high deductible plan
- Consider renters insurance for your personal assets.
- Make sure your auto insurance is adequate.
- Consider disability and life insurance.
The Bottom Line
Personal finance is a critical area for your mental and emotional well-being. As a student, IQ, grades, standardized test scores, and popularity ratings were the benchmarks against which your teachers and peers judged your success. Once you graduate, personal finance should become one of your dominant priorities.