I've been reading a lot of the commencement speeches out there. While I am as idealistic as the next person, there are some practical advice that I think every college grad should know. Now it's been 11 years since I graduated college and the world has changed so much since then, but I wish I had been exposed to so much more so that I would have been a little bit more prepared. First of all congratulations for making it. You, my dear, still have a long life ahead which means you now have to start planning and working towards securing a better life for yourself and your significant other (even if you are still single.) Planning isn't necessarily a core idea to the YOLO generation, but trust me, it will help you in the long run.
Retirement First
First thing's first, if you have secured yourself a job post graduation, congratulations! Now, when you get in to work, HR will have you complete all kinds of paperwork. If your company provides it, make sure you sign-up and start contributing to a retirement plan. This can be a 401k, 403b, IRA or any other type of retirement plans. Do this even before your first paycheck hits your checking account. Do this even if you are low on cash and you barely have enough to buy beer. By moving this money before you see it, you will less likely to spend it and less likely to miss its impact on your lifestyle. This is called automation. It ensures you are setting aside money for your future even if you can't see yourself that far ahead. Read more about it from Ramit Sethi at I Will Teach You To Be Rich, Suze Orman at Young, Fabulous and Broke or David Bach at TheAutomatic Millionaire.
Make sure you also contribute up to your company's match. This is essentially your company helping you with your retirement, take advantage of it. The sooner you start this the better.
Manage your finances with Personal Capital!
Understand How Credit Works
In the United States, majority of Americans live on credit. Don't be part of this statistic. Know your credit score and understand what its comprised of. Your credit score has an impact on your future purchases, future loans and future credit cards. If you credit is bad, it leads to money getting wasted in higher interest rates.
At this point in time, you credit history is barely a blip in the map. As you build it, take care of what you are adding. If you are applying for a credit card, take advantage of those that yield benefits that you can use. If you want to travel, take a look at some of the credit cards that provide miles benefits. You can read more about earning points responsibly from The Points Guy or Upgraded Points and start earning and maximizing travel points early.
This is also about planning. At some point, you'll have an itch to travel, you'll want to purchase a car, a house and in most cases, this will require a good credit score and a good credit history. Plan ahead because you don't want to be on the other side of the table when you and your future significant other discuss buying a new home together and you can't contribute because your credit history is shoddy. While right now, it's all about you, in the next few years, it won't be. Trust me on this. It doesn't matter how independent and single you are right now, eventually someone is going to need you to help them. This can be a spouse, a friend and even a parent.
Divide Your Savings
I know with the new job comes a new place to live, new things to buy, loans to repay and money to spend. Try not to get caught up too quickly on the fact that you have money to spend. For those living in the cities, this can be difficult, but be smart about it. Divide up your hard earned income before it hits your checking account. Compartmentalizing your savings will help you focus on specific goals and provide greater satisfaction. Open up an online savings account such as Capital One that has higher interest rates, allow you to manage separate accounts online and limits withdrawal options. Think about all of the experiences or things that you want and have a separate account for each. Start contributing to those even if small. Get your goals in there. For example, I had separate accounts for Travel, Education, and a Wedding account. My Wedding account I started even before I was engaged (wishful thinking or planning ahead ;)). We ramped up contributions as soon as we got engaged and it helped ease the cost and stress of a wedding.
I am sure there are plenty of other tips. Let me know which one you'll be following or what tip you would give a new grad.
