Financial Advice for Graduates

Whether you are graduating from high or college, chances are, you will be making more financial decisions than ever before. Those financial choices must be sound decisions. They will affect your life for many years to come. You do not want poor choices you make now to interfere with the plans your have five, ten and fifteen years into your future.

Greatest Asset - Know what your greatest financial asset is. No, it isn't your credit score or the amount of your line of credit. Your greatest financial asset is the ability to keep working. Earning a degree that will be in a career that is consistently in demand and you will be happy doing is essential to being able to continue working. Choose wisely, high school graduates!

Credit Cards - It is rather old fashioned to say this, but don't use them except for emergencies. Why would you buy something you can't afford now, but will have to pay for shortly plus all that interest? For the record, an emergency is not a last minute invitation to a party or a cup of coffee in the morning. Car repairs, travel brought about by a death or illness and emergency prescriptions qualify as emergencies.

Student Loans - For the high school graduate, do not take out student loans unless you absolutely have to. Apply for grants and scholarships instead. If you do take out student loans, start paying them before the ink is dry on the paperwork for the loan.

For the college graduate, do not fall behind on your payments. Pay a little extra each month. Write out two checks, one for the actual payment and write a separate check for the principle. Some debts and loans you have will fall off your credit report in time; defaulting on a student loan will follow you forever.

Utilities - Stay current on all of your utilities. Telephone, cable/internet and electric companies report late payments to the three credit report agencies. Those late payments will affect your credit score. That, in turn, will affect how much credit you can qualify for and the interest rate you pay for future loans.

Vehicles - Be careful when you purchase a car. Keep in mind that the value of a new car drops once you sign the loan; youon't even have to drive it off the car lot and it is worth much less than what you paid for it. Add in the interest on a loan and you owe much more than the car is worth. Whenever possible, pay cash for a car. Find a reliable car for a few hundred dollars and buy it.

Remember the type of car you buy influences the amount you will be paying for car insurance. Some insurance companies even charge more cars that a certain color. Research the insurance rates of a car before you buy it.

Savings - Save! Save! Save! Start simple - a savings account at your local bank. Once you built up some savings there, invest in stocks and bonds. If your employer offers a 401k plan or other type of investment/savings plans, take advantage of that - especially if they match the funds you are investing. Put away the maximum amount allowed for such plans. It may make your current finances a bit tight now, but it will be worth it in the long run. And, don't touch it! Not only will you have the fees and taxes to pay, you want that money to increase instead decrease.

Graduates, be careful with your money! Make wise financial decisions today that will save you from financial ruin in the future. Those decisions can and will influence your financial future for many, many years to come.