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Message
Financial Advice for College Graduate
Posted on 1/10/17 at 10:43 am
Posted on 1/10/17 at 10:43 am
I graduated last May and began working as a Civil Engineer this year. Obviously an engineering degree doesn't teach you near enough about finance. I am opening a 401K through my employer this month and have saved up some cash that I would rather do something with than let it sit in a checking account. I still have some student loans that I am paying off. What advice would you have for a 22 year old?
11
Posted on 1/10/17 at 10:53 am to Freeze_Warning
Have some fun 
Travel while you are young
If you really have extra money pound a Roth
Travel while you are young
If you really have extra money pound a Roth
Posted on 1/10/17 at 11:08 am to Freeze_Warning
quote:
I still have some student loans that I am paying off.
Pay those off ASAP.
Live like you are still a poor college student and save as much as you can. 45 year old you will appreciate it.
Posted on 1/10/17 at 11:31 am to Freeze_Warning
Congrads.. I am a civil engineer myself. I was burned out of school and said I would never go back. 6 months later I was taking prereqs for a masters in management. I will say that the one class that has been the most beneficial to me personally is Corporate Finance. Leaning how to value bonds, stocks, mutual funds, etc is something that has served me well. So first, I would recommend at some point look at finding a corporate finance class. It will be very helpful to you.
Second I would put enough into the 401k to get the companies match, and then I would invest into a Roth IRA. After the Roth is maxed out go back to add more into the 401k. I would also double down on paying off the loans (after 401k and Roth has been taken care of). Unless you have high interest cards/loans I firmly believe in paying yourself first. Good luck to you.
Second I would put enough into the 401k to get the companies match, and then I would invest into a Roth IRA. After the Roth is maxed out go back to add more into the 401k. I would also double down on paying off the loans (after 401k and Roth has been taken care of). Unless you have high interest cards/loans I firmly believe in paying yourself first. Good luck to you.
Posted on 1/10/17 at 12:17 pm to Freeze_Warning
quote:
Freeze_Warning
Ole Miss Fan
Member since Dec 2014
1 post
Wow.
quote:
I graduated last May and began working as a Civil Engineer this year. Obviously an engineering degree doesn't teach you near enough about finance. I am opening a 401K through my employer this month and have saved up some cash that I would rather do something with than let it sit in a checking account. I still have some student loans that I am paying off. What advice would you have for a 22 year old?
Good stuff. Pay of loans. Pay them off asap. Toss money into Roth...you can never replace the time you have. Vanguard some if you have left over. Avoid constant binge drinking and use disposable income wisely.
Have insurance for all items now to avoid them becoming major expenses later. Do not skim on dental and health insurance. Take care of your stuff. Buy quality items once and take care of them - car, clothing, etc.
This post was edited on 1/10/17 at 12:19 pm
Posted on 1/10/17 at 12:29 pm to Freeze_Warning
In a similar boat as you, I graduate this coming May.
I was always told you
1) save up enough to have ~3-6 months pay in an emergency account
2) meet the company match in your 401k
3) max a Roth
after that you can choose to do whatever you want with the disposable income you have left. I know I'll be saving for a house. I pay 2x in rent what I would in a mortgage for a similar house.
I would also advise that if you are young + single now is the chance to travel. you will never be this free if responsibilities again
I was always told you
1) save up enough to have ~3-6 months pay in an emergency account
2) meet the company match in your 401k
3) max a Roth
after that you can choose to do whatever you want with the disposable income you have left. I know I'll be saving for a house. I pay 2x in rent what I would in a mortgage for a similar house.
I would also advise that if you are young + single now is the chance to travel. you will never be this free if responsibilities again
Posted on 1/10/17 at 6:52 pm to Freeze_Warning
Find the appropriate balance between fun, travel, saving, and investing.
1) You can set yourself up really well by starting your own Roth IRA (minimum of 1k through Vanguard) and contributing when you can. Sure, maxing it out ($5,500 per year) would be terrific, but lets be real. You're 22.
2) Travel now if that's your thing. I don't regret my trips and I continue to travel as much as possible before kids.
3) If at all possible, wait a good while to get married or have kids. Don't spend much on any potential SO unless you're really serious.
4) Emergency funds are boring, but really nice to have. Mine is wayyy underfunded. I'd also recommend contributing to an HSA
5) Have some fun, but don't cripple your cash flow.
6) Don't get into credit card debt. No materialistic item is worth it.
7) If you intend to save, which you should, PAY YOURSELF FIRST. Save/invest and don't withdraw funds. Don't save with what's leftover, but Save first thing, then have your fun. If it's not obvious, you need a consistent budget.
1) You can set yourself up really well by starting your own Roth IRA (minimum of 1k through Vanguard) and contributing when you can. Sure, maxing it out ($5,500 per year) would be terrific, but lets be real. You're 22.
2) Travel now if that's your thing. I don't regret my trips and I continue to travel as much as possible before kids.
3) If at all possible, wait a good while to get married or have kids. Don't spend much on any potential SO unless you're really serious.
4) Emergency funds are boring, but really nice to have. Mine is wayyy underfunded. I'd also recommend contributing to an HSA
5) Have some fun, but don't cripple your cash flow.
6) Don't get into credit card debt. No materialistic item is worth it.
7) If you intend to save, which you should, PAY YOURSELF FIRST. Save/invest and don't withdraw funds. Don't save with what's leftover, but Save first thing, then have your fun. If it's not obvious, you need a consistent budget.
Posted on 1/10/17 at 6:54 pm to Freeze_Warning
The best advice I can give is to educate yourself. Read read read (or listen- I prefer audio books).
I have an MBA and still had no idea what I was doing with personal finances after school.
The millionaire next door- Dr. THOMAS Stanley
Think and Grow Rich - Nepolean Hill
Anything from Dave Ramsey (a little extreme, but good for building a foundation)
Good decisions in your 20s,make for enough room to have fun in your 30s
I have an MBA and still had no idea what I was doing with personal finances after school.
The millionaire next door- Dr. THOMAS Stanley
Think and Grow Rich - Nepolean Hill
Anything from Dave Ramsey (a little extreme, but good for building a foundation)
Good decisions in your 20s,make for enough room to have fun in your 30s
Posted on 1/10/17 at 9:23 pm to Freeze_Warning
My advice is 15% to the401k and or IRA and never reduce it.
Posted on 1/10/17 at 10:01 pm to Freeze_Warning
Here is what I did right out of college working for a Fortune 500 and living with parents. By no means perfect, but it set me up very well when I had a baby and left to start my own business a few years later.
- 401k to company match 6%
- $400 into everyday checking account each paycheck. This was more than enough for food, booze, partying, golf, etc. Essentially my only expenses at the time.
- $250 every paycheck towards $5k loan I took out to backpack Europe after college. Took 10 months to pay off.
- $100 of every paycheck into fun money account. I spent this on random shite like duck decoys, golf clubs, hunting shite, LSU gear, etc. Stuff I didn't want to buy with my checking.
- Remaining balance auto deducted into savings. I never saw this money and never felt like I was losing it from my first day on the job. It was nice to see what it amounted to after 18 months at home.
- In your situation, pay off your student loans as quickly as possible.
- Avoid debt, but build credit. I had my first credit card when I was 18 and have never spent a dollar of interest on the 5 I have now. I put everything on a credit card and paid of weekly or 2x/week. Paid for 2-3 trips in full over the years.
Nobody will give you exact advice on where to put your money. Hit 401k to match, maybe throw some in an IRA, have some fun, and put the rest in savings. Enjoy that until you get married or have kids. I treated my $400 in checking like it was my only cash for the pay period. Kept me from being reckless, but was enough to enjoy myself.
As someone else said, the most important thing is finding a balance. Don't sacrifice the freedom and flexibility at this point in your life to throw a few more dollars towards your future. I went to LSU games, Vegas, NYC, and many other places all while being responsible and staying on a budget. Wouldn't trade that for anything.
- 401k to company match 6%
- $400 into everyday checking account each paycheck. This was more than enough for food, booze, partying, golf, etc. Essentially my only expenses at the time.
- $250 every paycheck towards $5k loan I took out to backpack Europe after college. Took 10 months to pay off.
- $100 of every paycheck into fun money account. I spent this on random shite like duck decoys, golf clubs, hunting shite, LSU gear, etc. Stuff I didn't want to buy with my checking.
- Remaining balance auto deducted into savings. I never saw this money and never felt like I was losing it from my first day on the job. It was nice to see what it amounted to after 18 months at home.
- In your situation, pay off your student loans as quickly as possible.
- Avoid debt, but build credit. I had my first credit card when I was 18 and have never spent a dollar of interest on the 5 I have now. I put everything on a credit card and paid of weekly or 2x/week. Paid for 2-3 trips in full over the years.
Nobody will give you exact advice on where to put your money. Hit 401k to match, maybe throw some in an IRA, have some fun, and put the rest in savings. Enjoy that until you get married or have kids. I treated my $400 in checking like it was my only cash for the pay period. Kept me from being reckless, but was enough to enjoy myself.
As someone else said, the most important thing is finding a balance. Don't sacrifice the freedom and flexibility at this point in your life to throw a few more dollars towards your future. I went to LSU games, Vegas, NYC, and many other places all while being responsible and staying on a budget. Wouldn't trade that for anything.
This post was edited on 1/10/17 at 10:13 pm
Posted on 1/13/17 at 7:52 pm to Freeze_Warning
I graduated last May and finally locked down a great job. My company has a 5% $1-$1 match and I'm maxing that out and throwing some of my bonus cash into that as well (Roth 401k)
This post was edited on 1/13/17 at 7:53 pm
Posted on 1/22/17 at 6:46 pm to Freeze_Warning
If not too late, do not marry someone who does not share your philosophy/approach to finances and savings.
If you get with one who has to have the big house, latest fashions, toys, etc. and will put it on a credit card, you will be miserable.
If you get with one who has to have the big house, latest fashions, toys, etc. and will put it on a credit card, you will be miserable.
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