Not everyone is knowledgeable about money and finances, however, it’s a learning process. Keep in mind you don’t know what you don’t know until you know it and we’re here to help. Gaining financial knowledge comes with time and some help. Let us help educate you on a wide range of topics from financial planning, 401k rollovers, and even investing. Let’s get started today to work towards expanding your financial knowledge. We’ll work with you through every step of the way. Give us a call to set up an appointment.
Financial Tips for Graduates
We thought it appropriate to give you 5 Financial Tips for Graduates because we know when you’re just beginning to gain your independence in the world, the thought of managing your finances is a terrifying. For most of us, our parents were there to help us along the way with paying bills, rent, and college tuition. But when graduation rolls around, the reality and panic begins to set in that you’re officially an adult. Although this is an especially difficult time for young adults, it also can be stressful on parents as you completely let go and allow your child to enter the real world. For these reasons, we thought it would be helpful to discuss 5 financial tips for graduates and their parents to feel comfortable during this life transition.
5 Financial Tips for Graduates:
- Create a Budget
Although this may seem obvious, it is extremely important, and RARELY done! This is probably the first time in your life that a large, steady paycheck is being deposited into your bank account. For this reason it can be very tempting to impulsively spend, but this is when a well-organized budget comes into play. It’s okay to treat yourself occasionally, but just remember to budget for those guilty pleasures. Even though, creating a budget may seem like a burden, there are countless resources, such as financial smart apps, to help you easily manage your budget. Using a budget now will create healthy financial habits down the road making life much easier for you.
- Start Saving for an Emergency Fund
Saving is the key to financial success, so why not get a jump-start on this at a young age? Saving is a habit and the earlier you develop this habit the better, especially due to the volatile state of our current economy. Life throws you curve balls, so it’s important to have an emergency fund. You never know when you may be laid off, are involved in a car accident, or have costly medical expenses. We suggest saving six to nine months worth of expenses into your emergency fund, so you can be prepared in the event of one of these worst-case scenarios.
- Begin Funding a Retirement Plan
You just graduated college and retirement is probably the last thing on your mind. Numerous studies show that it’s crucial to start contributing to your retirement fund as early as possible. This is definitely not the most glamorous way to use your paycheck, but it will be beneficial for you in the long run. Many employers match a portion of what you contribute to your 401k. This is an exceptional perk that employer’s offer and if yours does then take advantage of it! If you can swing it, contribute the maximum amount that they match. It’s pretty much like getting free money. You’ll be thankful you did many years down the road. If your company does not have a retirement plan, then don’t worry, you’ll just have to start an IRA.
- Start Paying off Student Loans
After four years of college, most of us will likely accrue some student loan debt. While we are of the belief that this would be considered “good” debt, if there is arguably such a thing, it’s important to understand how paying this down consistently benefits you in the long-run. We know you’ve seen them…the countless ads on your Facebook feed about student loan consolidation help and other various debt programs out there. We’ll get to the bottom of these in future posts but know that a simple phone call to your loan servicer (the company that mails you the statement) is all you’ll likely need to consolidate all of your student loans. No need to pay another company to consolidate your federal loans into private loans. There are countless options to consolidate with various terms – all designed to fit your lifestyle. How awesome is that?! Keep in mind that different loan types have varying consolidation opportunities and rules. We suggest you do whatever you can to choose a fixed rate repayment plan and make it a line-item in your budget. Try to automate the payment each month too that way you’ll help your credit score by showing consistently on-time payments. The other benefit to federal student loan debt is the debt forgiveness in the event of your death – your spouse or family won’t be liable; basically the debt will die with you.
- Protect your Credit Score
It can be tempting to swipe the credit card whenever you get the desire to make a purchase, but take caution! Be sure to pay all bills on time because even if you miss one payment your credit score could take a plunge. There are many dangers associated with poor credit that can make it difficult to get a good job or approval for an apartment lease, not to mention paying higher interest rates for years to come just because you missed a payment. To avoid these problems and to ensure a high credit score, set up automatic payments for your regular expenses, such as rent and insurance. If you can swing it, choose to use a software solution like Credit Karma to help you monitor your score and to ensure items reported to your report are accurate.
During this monumental time of your life, we want to help guide you towards financial independence. We’re a Johns Island Financial Advisor that specializes in financial planning and investment advice. We’re also pretty laid back and genuinely fun to be around, ha! Let us help you get off to the right start as you begin the next chapter of your life. Contact us today to set up a complimentary appointment.
Image Credit: Ian Norman
Creating a Budget
Who says you can’t budget for your guilty pleasures? Well, we believe you can! Of course your budget may include things such as utility bills, gas, and groceries, but don’t be afraid to incorporate the fun things when creating a budget. Whether it’s a weekly case of beer or your next vacation to the Caribbean, don’t deprive yourself when it comes to your budget. It’s all about how you budget for these things, which can be difficult, but that’s why we’re here to help! Contact us today and let’s talk so we can help you create the perfect plan.
Budgeting Apps
Who says creating and maintaining your personal financial budget has to be a painful process? Sure, the mention of budgeting naturally causes us to cringe, but that doesn’t have to be the case. Tracking your income and expenses can be fun by adding animations, visually appealing graphs, and budgeting for the cool things that are on your wish list.
Now, there’s no denying that we live in an age where time is of the essence. All of us have busy lives and its nearly impossible to find the time to sort through countless receipts and manually track our spending in a tedious excel document. But, technology is the easy solution to this dilemma. We have the ability to check our email, surf the web, and stay up to date on the current news all while we’re on the go. It’s just as easy to implement that same mobility to your financial budget with the help of many easy to use budgeting apps.
Of course when you visit the app store on your phone and search for budgeting apps there are countless options to choose from. So just to help you, we’ve picked two of the top financial apps out there and analyzed each one.
First, lets start with the very popular application known as “Mint”. This program helps you create a personal budget based on your account information and spending habits. By connecting securely to your bank accounts, credit/debit cards, investment and insurance accounts, this app will automatically track your expenses and generate tips customized just for you to help cut unnecessary spending. Mint also has a fully operational website where you can link all of your accounts and then manage by use of the app. Mint also allows you to pay bills directly through the app, plus you can even check your credit score! The visually appealing graphs and charts help make budgeting fun, especially for the younger generations.
Since it is compatible with iPhone and Android operating systems as well as tablets and computers, it’s easy to manage your finances no matter where you are. Although the possibilities are endless with this app, we found the learning curve to be greater than the others we’ve worked with.
One could argue that setting up your bank account and credit card information within an application could make you uneasy. While most of these software systems use high level encryption similar to that of your bank’s online access, we certainly understand if you wonder if your financial information is truly secure. If you fall into this category, don’t lose hope in budgeting applications just yet!
Our next favorite is, “Wally”. This app might be for you if you’re apprehensive to the automated approach to budgeting. Unlike Mint, you must log your expenses manually with Wally. Although this might sound tedious, there is a cool feature in which you can input an expense by simply snapping a picture of your receipt! The app consists of a simple design that is user friendly and merely tracks income and expenses to ultimately project your savings each month.
Unfortunately, there is no tablet or computer version of Wally, so you are limited to tracking your expenses only on your smart phone. Bottom line, if you’re new to budgeting or are just looking for a simple way to monitor your spending and saving, then Wally is the budgeting app for you!
Smart phone applications are just one of the many ways to budget your finances, but ultimately you have to find a method that works best for you. Keep in mind living on a budget is simply the means by which you plan for future expenses. Budgeting can be overwhelming at first, and that’s why we want to help! Get in touch with us today so we can work with you to construct your perfect financial plan and prove that budgeting can be fun!
Image Credit: PHPLadies