5 Easy Tips For Grads to Help Get Their Financial Futures on Track
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As you know, for all new grads out there, big decisions lay ahead. Whether you're trying to land that dream job or move across the country to embark on a new journey, the road is filled with exciting opportunities.
To make sure all that hard work in school is paying off, there is no better time than now to start building healthy financial habits.
Luckily, Acorns, the leading investment app to help anyone invest early and often, has five easy tips for grads to help get their financial future on track.
- Create a Budget
- Start Investing
An essential step to building long-term financial health is understanding exactly how much money is coming in and where it's going. Knowledge is power when it comes to financial wellness and creating a budget is an important tool to learn how to live within your means.
More than ever for grads and Millennials, it's important to start investing early and often. Acorns simplifies investing and makes it easy to invest your spare change from daily purchases. The Securities Exchange Commission breaks down how every dollar makes a difference in their "Saving and Investing for Students" booklet:
- "If you buy a bottle of soda every day for $2, that adds up to $730 a year. If you saved that $730 for just one year, and put it into a savings account or investment that earns five percent a year, it would grow to $931.69 after five years, and grow to $3,155.02 after 30 years."
- Or with Acorns, you can do both — buy the soda and invest the spare change. If the soda costs $1.50, the Acorns app will round up the purchase to the next dollar amount and invest the $.50 change, making investing as easy as buying a soda or daily coffee.
Many new grads are on tight budget and might think they are not able to contribute to a company's 401k program.
- Take time to inquire or speak to your HR department — many companies offer to match your contribution up to a certain percentage.
- If you are currently job hunting or if your new company doesn't offer a 401k, you can set up recurring deposits using Acorns by selecting the amount of money you wish to invest regularly and choosing the desired time period. Even $10 a week is a start and will make a difference over time. There is also the option of investing a lump sum, which is a savvy and smart way to utilize any extra cash you might have received as a gift for graduation.
We all know that credit cards can lead to trouble. However, if you do use a credit card, try to pay off your balance in full each month. If you are carrying a high balance, there are options to consolidate and transfer debt into a zero interest card.
Last but not least, don't forget to invest in yourself! Take that surf lesson, learn a new language or stick to a new exercise plan. Investing is a way to create a sound future both financially and for your overall wellness.