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.
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!
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:
Consider reading these books:
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.