Saving Tips For Recent College Grads :: Wamhoff Financial & Accounting


Saving Tips For Recent College Grads

The National Center for Education Statistics estimated that nearly three million associate’s and bachelor’s degrees, and close to one million advanced degrees would be awarded for the 2013-2014 school year. In today’s world of credit cards and ample free time, a great number of graduates are moving onto the 9-5 career without the knowledge of how investing for their future works, and find themselves faced with the decisions of whether and how to participate in retirement savings plans. Matt Allgeyer, Financial Planner at Wamhoff Financial Planning and Accounting Services, offers advice.

Start early – the most important factor in saving for the future is the time you have to invest.

  • Giving your investments more time to grow means they’ll be worth more when you reach retirement age.
  • If you invest $5,000 into a Roth IRA account per year starting at age 20, at an 8% return, the value at age 65 would be over $2 million.
  • If you invest $5,000 into a Roth IRA account per year starting at age 39, at an 8% return, the value at age 65 would be $437,000.
  • Know when you will need the money before you begin investing so that you can create a plan for how much you’ll want to set aside from each paycheck.
  • Learn about your company’s retirement plan right away, and know the benefits of using it.

Plan to Save.

  • If you begin putting money away when you land your first job, you’ll never miss it because you didn’t have it to begin with. If you don’t, you end up adjusting to a lifestyle based on that higher take-home pay and it’s harder to scale your lifestyle down to begin saving later.
  • If your company matches, you essentially get “free money” put into your retirement account.
  • Learn what options are available to you through your employer’s plan.
  • A 401k or 403b are both retirement vehicles that can hold mutual funds, stocks, bonds and others.
  • If you work all year and save nothing, then you have nothing to show for the year that you’ve worked.

Other tips.

  • Control your debt from college and beyond before it controls you.
  • Create a budget and stick to it.
  • Be vigilant about maintaining an excellent credit score so that you’re a good credit risk.
  • Learn about insurance and planning
  • Enlist the help of an expert to help you plan.
  • Personal finance is a critical area for your mental and emotional well-being, and one of the top two reasons for divorce in our country. Make this a top priority.