Advice to Give College Grads

Next month lots of people will be graduating from college and beginning a new life. In honor of that, the May issue of Money has a pretty good article offering up 7 Lessons for College Grads (no link yet). There’s nothing new here, but they could be just the thing for a college grad.

THE LESSONS

Lesson 1 – Give Yourself Some Credit

As the author states, get yourself ONE low-rate credit card and use it wisely. This will help you build up a credit history and if you are RESPONSIBLE, will help your credit score, which will give help you get lower interest rate loans when you buy a house or a car. ALWAYS pay your bill in full and on time each month. FICO loves this kind of stuff.

Lesson 2 – Divide and Conquer

Figure out your wants and your needs. Your needs are your priorities and if there’s money left over, you can save for your wants. DON’T charge your wants. I’ve done it both ways. It’s much nicer to purchase wants with cash than it is to charge them and then take months (or years) to pay them off. Trust me on this one. The article’s author says to have a checking and savings account and to have your needs money transferred to your savings account so that you don’t spend it on your wants.

Lesson 3 – Buy a Suit

The article suggests a blue, grey, or black suit. I say a navy blue because it is the most versatile. Don’t go cheap either. Get a nice suit ($500 – $1,000) and make sure it is tailored correctly. My local Dillards runs 50% off sales twice a year. That’s a great way to buy a suit.

Lesson 4 – Steady Your Student Loans

Figure out how much you owe and consolidate all your student loans into one loan with one vendor at a low interest rate. The author suggests checking out Sallie Mae.

Lesson 5 – The Early Bird Gets the Tee Time

I have written a lot about how people should start saving for retirement as soon as possible. Unfortunately, retirement planning is usually the last thing on the minds of college graduates. However, before you decide to put it off, read these posts I put together:

The Cost of Waiting ONE Year – MUST READ!

How Much Can You Save in a Lifetime?

CALCULATOR: Lifetime Savings

The bottom line is: every year you put off saving for retirement means you have to save that much more in order to meet the same goal. In other words, when you are young, time is on your side. DON’T WASTE IT!

Lesson 6 – Invest Appropriately

Invest in stocks, not bonds. Why? Because you have time on your side and stocks have been proven to be superior wealth builders over the long run (20 – 40 years). If you aren’t sure about this, you owe it to yourself to get an investment education. For more information, check out these posts:

S&P 500 Fun Facts

More S&P 500 Index Stats

Predicting the Future Returns of the S&P 500 Index

Consider reading these books:

The Future for Investors

The Coffeehouse Investor

Predicting the Markets of Tomorrow

The Little Book of Common Sense Investing

The Bogleheads’ Guide to Investing

These will give you a great start on understanding investing and how the different asset classes work. Most of these books are probably available at your library.

Lesson 7 – Get Your Résumé in Shape

Make sure your résumé is up-to-date and readily available (stored online somewhere) so that you can access it quickly as you hear about job openings. The author suggests keeping it to one page (I agree).

I think that’s a pretty good list. One thing the author left out was the importance of networking. This is one thing I wished I would have paid more attention to back when I was in college. If you have no idea what I’m talking about, check out Harvey Mackay’s Dig Your Well Before You’re Thirsty and Jeffrey Meshel’s One Phone Call Away. Both are excellent books on networking.

Good luck!

15 thoughts on “Advice to Give College Grads”

  1. Given the brouhaha surrounding Sallie Mae (buyout or no buyout), I would recommend staying as far away from them as possible.

    I got a fantastic rate and decent incentives on my Direct Loan, but unfortunately that’s not an option for everyone.

  2. I would think whether you need a suit depends on your job. In certain fields no one wears them so you don’t really need one.

  3. As far as Student Loans go, look and see if your state has a non-profit that offers loans and consolidation. I know my state (South Carolina) does — South Carolina Student Loan Corporation. These non-profits tend to have lower rates than for-profit corps.

  4. @ Andy – I feel pretty strongly about the suit thing. As a full-fledged adult, you are going to need a suit sometime, somehow, someway, whether it’s for work or personal.

    Also, most places where casual dress is standard, still expect you to interview in a suit. And quite often, client/customer meetings are conducted in business attire, even if jeans are okay back at the office. How silly would you look if your boss assigned you to fill in for him/her at a meeting, but you couldn’t go because you don’t have a suit.

    This comes under the heading of better to be prepared than to either miss an oppty or have to run out at the last minute to get one – it is the sort of thing you should take some care in selecting. Besides, suit alterations in the U.S. seem to take two weeks (Why is that when I have had suits tailored same day in Italy?). So, if you end up wearing something right off the rack, chances are it’s not going to look very complimentary.

  5. I agree with Miguel, even though I’ve spent my career as a programmer in Silicon Valley – not exactly high-fashion territory. My daily “work attire” is shorts and a T-shirt in summer and a sweater and beat-up khakis in winter.

    But I do wear suits to interviews, and when doing customer visits in Japan and Korea. And I do have “nicer clothes” (but not a suit – that would be strange) that I wear when I do the “geek pitch” to investors.

  6. On suits:

    If you are a woman, don’t necessarily follow the black suit advice. A tasteful suit in a brighter color may allow you to stand out from the other candidates. Be sure, however, that skirt hemlines fall to the knee; also the suit should always be of good quality. If you are low on cash, buy a classic Jcrew from a consignment shop or look for something good at Filene’s rather than the polyester number at Fashion Bug. Good suits generally start at a few hundred dollars.

    Men can also use a similar strategy by going with a colored shirt, etc. For many companies, you don’t always necessarily want to appear super conservative; a hip but tasteful dress can give you a confident, savy appearance. If you are clueless about fashion, however, this tip is *not* for you, you are probably better off playing it safe.

  7. Sallie Mae is the most evil company on the planet.–Bill Clinton

    Do not consolidate, I made that mistake. If one lender holds all your loans they do not have to release them if a better rate becomes available. Also Sallie Mae charges “fees” and will adjust your rate despite what your original documents say–Mine started at 7.25% and ended at 9.5%. THe legal limit was 9.25% at that time. If yo consolidate, use the Department of Education.

  8. I definitely agree with you on the networking point, JLP. Both my jobs and my husbands job were found by networking. Use your family and friends to help you find people in the industry of interest to you. Ask them out for lunch/coffee to learn a little bit more about their career path. Keep in touch with all these people over the years…

  9. Lesson 3 – I agree that every man needs a suit, and blue is very versatile, but I would think about getting a dark charcoal. It is not as formal or as intimidating as black, but can be worn most occasions where you can wear black. Most jobs in the US don’t require a suit every day, but they are pretty much mandatory for interviews.

    The other important times to have a suit include formal dinners (company holiday party), weddings, baptisms, and funerals. Funerals is a big reason I would consider going with a charcoal over a navy blue. Charcoal is more somber.

    You can get a great quality suit at JoS. A. Bank for $350-600 on sale.

    Lesson 7 – Learn interviewing skills.

  10. I’m a college grad with a minimum wage job. I have student loan debt, no available credit, and I certainly don’t have $500-$1,000 for a suit (or for anything else.

    What should I do?

  11. You need a suit, I don’t care what your job is. I’m in medical school (so basically I wear PJs all day) and I still own a suit (several). Older individuals in business are looking for any reason to blow you off and a stupid youth – don’t give them one as easy as your appearance.

  12. Minimum Wage — Owning a decent quality suit should be on everyone’s list. If you can not afford a high quality suit, start looking around at a mid level suit. Nice suits can be bought in the $300 range, and you may be able to find them much cheaper when the season changes and new styles come out.

    If this is still too much, JC Penny also has acceptable suits at the $150 dollar range on sale. (Buy something cheap first, and get a 15% coupon for doing the survey on the back of the receipt).

    Buy a classic dark suit (navy/gray/black). Even if the cut changes, it will not go out of style. If you need to wear it often, mix it up with different shirt/tie combinations.

    You did not say what your degree was in or your career plans. If you will not be in an office environment, and will only need a suit for an initial interview and occasional personal wear, an inexpensive suit should meet your needs.

  13. the best piece of financial advice i’ve ever seen was a very simple statemment:

    CREDIT MORTGAGES YOUR FUTURE TO PAY FOR YOUR PAST

    once you truly absorb this idea, you begin to see credit in its true light and you begin to control it, instead of the other way around. in the end, it really doesn’t matter how much money you make. unless you fix your relationship to debt and credit, it will never be enough.

    be smart. get free.

  14. What do you do when all your advice has failed
    major segments of the US population? AND IT
    HAS.

  15. Wow. So after graduating from one of the top-ranked schools in the country, in the middle of working on a post-baccalaureate certificate in accounting (with a 4.0), and not being able to get a call back on an internship in my field, or anything job that is above MINIMUM WAGE, the thing I’m supposed to be pondering is what suit to buy? Well color me tickled, how do I AFFORD that suit again?

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