ROCHESTER, N.Y. (WROC) — CPA Dave Young of the New York State Society of CPAs offered up his financial real-world lessons for 2021 graduates Thursday during News 8 at Sunrise.
“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. Here are his Top 5 Real-World Lessons:
Real-World Lesson #1: 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.
Real-World Lesson #2: 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.
Real-World Lesson #3: 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
Real-World Lesson #4: 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)
Real-World Lesson #5: Face Facts – 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.