Four Smart Money Management Tips for New Graduates
Graduating from college or high school is an exciting time! As graduates think ahead to their next professional or educational goal, it’s important to set a foundation for a strong financial future. Even if grads aren’t thinking about buying a home in the next year or two, it’s crucial to start a roadmap for a successful financial strategy.
Share these tips with new grads to help them start thinking about money management:
Look at your investment options
Start identifying opportunities to invest some of your money – even a little can go a long way over time. Do your research and find out what type of investment is a smart move for your personal goals. Educate yourself on stocks, bonds, and mutual funds, and how to make your money work for you. When you’re ready to buy a home, your savings and assets are an important part of qualifying for a loan. Building those assets sooner rather than later can give you a head start.
Create a budget
Starting a budget can boost your short- and long-term goals by helping you outline your financial strategy. If you’re looking for a tech-forward budget, there are lots of mobile apps and programs that can help you automate your budget. You can also start by taking stock of your current income, debts, and monthly payments, and then you can break down how much money you can afford to spend on things like rent, car payments, and more. When you create your budget, make sure to include things you want to save for (like a down payment!).
Start tackling debt
Avoid taking on any new debt and start working to pay down your current debt. Be careful with credit cards and other line of credit offers – remember that each time you pay for something with credit, it translates to another monthly payment. Whether it’s taking on a second job, moving in with your parents, or implementing other money-saving ideas, paying down debt is an important piece of your financial picture. One of the most important things lenders look at when determining a potential home buyer’s eligibility for a loan is their debt-to-income ratio and credit score, so start thinking about it now.
Don’t stop learning
Graduation is an amazing milestone in your educational journey – but it shouldn’t stop just because you’ve taken off your graduation cap. Educating yourself about personal finance will set you up for a future of success in investing, home buying, and more. It’s never been easier to network with finance experts, find online resources and books, and check out local events on financial wellness. Take your money into your own hands and develop a plan for your next step.
If you are a new graduate – or know someone who is – and are interested in home ownership as a part of your financial future, reach out to us today. Let’s start a conversation about important steps to take if you want to plan for a mortgage.