Whether graduating from high school or college, this year’s crop of grads undoubtedly learned a lot – including, one would hope, some practical life skills. But, say the money experts, it’s not uncommon for kids to graduate without a good grounding in the money management skills they will need in the real world.
Holly Perez, a consumer money expert at Intuit, told U.S. News & World Report the top five money lessons she believes today’s graduates need to live by:
Know the basics – Get acquainted with on-line tools that help you monitor your finances. Many automatically categorize your debit and credit card transactions, meaning you can see how much you've spent on groceries, entertainment, etc. at a glance. You can also set up budgets and get notifications every time you're close to busting your own budget.
Live within your means – If you now have your first full-time job, spending money is tempting. Keep your regular expenses in mind at all times and resist buying extras you can’t afford without getting into debt. If you’re smart, you will make a monthly deposit into savings as one of your regular expenses.
Pay off student loans – More than 60 per cent of this year’s college grads will leave school in debt for student loans. Be proactive about paying more than monthly minimums, because the sooner you pay off your debt, the sooner you may really will have disposable cash.
Stash away retirement savings – It may seem like a lifetime away, but it’s never too early to start saving for retirement. Challenge yourself to keep on increasing your contributions as your income increases.
Be wise with credit cards – The short rule is, if you don’t have the cash to buy it, you probably shouldn't buy it at all. Credit cards are great for convenience and emergency situations, but be wary of using them for big-ticket items that will put you into long-term debt with high interest rates. Use cards cautiously and pay off balances every month.