Personal finance tips and advice for recent graduates

What is one of the best parts of the degree?

Morningstar columnists and specialists are here to tell you what they wanted to know when they graduated. Here are their words of wisdom, personal finance advice, and more for graduates.

Money Saving Tip: Save when you can, where you can

“When you’re just starting out, saving for retirement seems hopelessly abstract. It’s incredibly difficult to prioritize other financial goals like buying a first home or going on a big trip. So here are some tips: how valuable it is to get started save for retirement as soon as possible, set some shorter-term financial goals at the same time and reach them. Scoring smaller financial wins will help you capture the value of savings in a way that saving for retirement, a distant and abstract goal, may not . “

—Christine Benz, director of personal finance and retirement planning

“If your business offers a 401 (k) or 403 (b) plan, invest in it as soon as possible. That way, you prepare yourself for investment success. How much you save and how much time you save are one-two. shots of a winning approach to wealth creation for retirement And if your company matches part or all of your contribution, so much the better!

“Invest your pension plan contributions appropriately. Don’t let your contributions reside in a low-interest cash account because you don’t know where to invest them. If your company doesn’t default on your plan’s target date vehicle that is closer to your retirement date (which may be hard to think of, considering you’re just entering the workforce), put the money there yourself. As time goes by and you build your kitten into retirement, you may decide to diversify beyond the target date option. But that’s the best place to start. “

—Susan Dziubinski, director of content

“Contribute to your 401 (k) as soon as possible. Even if you think you can’t afford it. It doesn’t hurt that much if it comes out of your check before you see it!”

—Sylvia Hauser, senior editor-in-chief

“I keep my retirement portfolio very simple. It’s a broadly diversified group of passively managed funds across major asset classes. Being consistent and not complicating things has given me the peace of mind knowing that I should be in decent financial shape if I ever decide. retire.”

—Amy Arnott, CFA, portfolio strategist

Shopping tip: Find the balance and spend consciously

“Hear the quiet voice inside. It’s easier said than done, but one thing I wish I had known when I was younger was that the obvious traps of success – making more money, managing a group of people at work – wouldn’t necessarily bestowed more happiness. Don’t assume it will be worth climbing every rung of the career ladder. Ask yourself, “Will I be afraid of this job Sunday night, or am I looking forward to the coming week?” Sometimes there will be alignment , the work pay will be fun and worthwhile. But sometimes it won’t be there. Err on the side of fun and pain.

“Your ‘time allocation on earth’ is more important than your financial allocations. There is no shortage of information on how to manage your financial resources, how to set up an asset allocation and select investments, for example, also on Morningstar.com But there is less guidance on management than what is by far a more valuable resource: our time on earth. Life flows so fast, so it’s worth ruthlessly tweaking when thinking about how to spend hours and days. “

—Christine Benz, director of personal finance and retirement planning

“Things are just things. Focus on the experiences. When we start earning for the first time, we all have the urge to buy everything we can afford, and I certainly freaked out spending as much (and sometimes more) as I could afford. . Many others in this thread have said that you should start saving early, and you should. But when it comes to spending, my advice would be to spend intentionally. I have learned that I don’t necessarily remember the essential phone or car, or the perfect dress that I splurged on after starting earning, but I remember every gig, every backpacking adventure and every budget trip, even the ones infested with fleas. Focus on the experiences, the memories will last much longer than the latest AirPods. “

-Ruth Saldanha, editor-in-chief of Morningstar.ca

Personal Finance Tip: Stand up for yourself

“Negotiate for the best starting salary you can (within reasonable limits). Don’t underestimate them hoping to wow them and get promoted later. All your subsequent raises and bonuses will be pegged to your starting amount. Find out what your skills are worth. , and don’t belittle yourself. “

-Sarah Newcomb, behavioral economist

“Network: I don’t mean artificially. I mean, go out, chat with people outside your department, learn as much as you can about what other people in the company are doing. Find out both their functions and the personality of those departments.

“Sure, make your boss happy. Your boss is the most important person in your early career. But don’t put all your eggs in that one basket. Through your actions, make yourself as visible to decisions as possible. multiple-makers. You want to have several important people standing up for you, not just one “.

—John Rekenthaler, vice president of research

Financial Planning Tip: Establish good habits – money and more

“Don’t let your credit card balance exceed a month’s net pay. Credit card debt will silently strangle your finances.”

—Sylvester Flood, chief content strategist

“Remember that federally funded student loans are considered ‘good debt’ and paying them off early is not necessarily your best financial move. If you can consolidate your loans at a low interest rate and your payments are manageable, then you can. carry that debt for a long time without it damaging your credit or lifestyle. The rule of thumb here is that if your student loan interest rate is around 6% or lower, it’s probably best to invest the your extra money rather than paying it debt down faster. “

—Sarah Newcomb, behavioral economist

“You live below your means. It doesn’t seem like much fun. But since many young college graduates already have student loan debt, don’t take on more debt by spending more than you earn. Make sure you have the income you need to cover your bills, create a emergency fund and start building a kitten for retirement, and then treat yourself to those tickets to Lollapalooza.

—Susan Dziubinski, director of content

“Get used to voting. Less than half of Americans between the ages of 18 and 29 voted in the 2016 presidential election, far less than the overall turnout. As dysfunctional as the system seems to you, vote so you can make the change. Vote in local national and national elections, and even during the midterm. Let your elected officials know about priorities such as climate action or health care. “

—Leslie Norton, editorial director, sustainability

Career Tips: Be flexible

“Don’t get overwhelmed by trying to choose a lifelong career when you’re 20. My original plan when I started as a fund analyst at Morningstar at the age of 22 was to try things out for a couple of years. and then figuring out what to do next. I’ve been lucky to end up in a large company that I’ve stayed with for most of my career, but I’ve also tried many different roles over the past 30 years. I’ve even left Morningstar briefly to work as a financial advisor for another company. Experimenting with different roles has allowed me to find strengths I never knew I had, fine-tune what is important to me and discover the weak point between what I’m good at and how I can contribute to empower investors “.

—Amy Arnott, CFA, portfolio strategist

“Look for the widest margin between opportunity and cost of living when starting out. Don’t hesitate to go overseas for it. I graduated from the recession that followed the financial crisis with the goal of a career in journalism, and there were very few opportunities in North America. I ended up in Hong Kong with a two hour commute, including a boat ride, each way. What I did on that commute (meals, work, podcasts) was under my control, my rent it was manageable, and the opportunities were top notch. After a few years, I was able to eliminate that commute, go home and start building the daily routine I wanted. If you are interested in going abroad, consider the plans degree / postgraduate degree, especially if they come with a scholarship. Sometimes you can live on campus, schools often help on the financial side and can get you started with an entry level job. Employers also appreciate the ‘international experience, which is a form of human capital and education and will b benefit you for the rest of your life and career. “

-Andrew Willis, content editor for Morningstar.ca

Leave a Reply

%d bloggers like this: