“Off The Wall” Blog
Unique, straight-forward, unfiltered opinion on topics of concern for individuals with newfound wealth.
Career advice and personal finance money tips for college seniors.
My daughter is a senior in college and came home for spring break. Last night was family pizza night. She went out for the pick-up and came back with the two pizza boxes. When we opened the boxes we instantly realized one of the orders was wrong.
“Did you open the lid and peek when you picked up the order?” I asked.
“I never thought to look,” she said. “What other tips do I need to know?”
As college seniors graduate this spring and begin to transition into the workforce, there are several areas they may not be prepared for.
Here’s the short list:
It all starts with a job.
You have to hustle, sharpen your resume, and most of all be exceptionally prepared for every interview. Surf the internet, read the company’s annual report, google the interviewer’s name to learn more about that person, know who the competitors are, and be ready when the interviewer asks, “Do you have any questions?”
Make sure you have at least three intriguing questions, and ask them!
Create an Excel spreadsheet for your budget (there are also several free options on the internet). Just because the federal government can’t balance its budget doesn’t mean you shouldn’t fully understand where your money is going. Set priorities for the various categories of your budget: what are your non-negotiable expenses (college loan payments, rent, utilities, credit card payments, health care, car loans) and what are your negotiable expenses (eating out, travel, entertainment)?
Consider renting an apartment with roommates or living with your parents. If you do live with mom and dad, offer to pay rent or take on additional responsibilities around the house.
Do you really need a car? Yes, they’re convenient, but the cost of gas, insurance, parking, and maintenance add up quickly. If you are lucky to live in an area with good public transportation, strongly consider not owning a car. Remember, there’s always the Zipcar option.
Many graduating seniors have college loans that will become a significant part of their monthly expenses. Take the time to fully understand what your monthly payment will be, what the interest rate is, and the terms of the loan. You may be surprised by the monthly payment. SallieMae.com is an excellent resource and offers solid advice on managing your debt.
A very important money tip for college seniors is to remember, now is the time to start building your credit history, so it is critical that you always stay current with your liabilities.
You got the job.
I will always remember the simple advice given to me when I got my first job: Arrive 30 minutes early and stay 30 minutes late—your boss will notice!
Understand your company employee benefits and take advantage of them. Participate in the company retirement plan and company match. Most retirement plans offer assistance with investment allocation models based on your age and aversion to risk. The current consensus for equities is positive and with a 30-year investment horizon and interest rates at 30-year lows, a portfolio weighted to equities makes good sense. A good contribution goal is 10 percent of your salary, and because you are contributing pre-tax money, your paycheck is not lower on a dollar-for-dollar basis.
Finally, take advantage of your company’s Flexible Spending Account (FSA) by using pre-tax dollars for qualified medical and dependent care expenses. Participate in the group health, dental, and vision insurance plans—they are often partially covered by the employer.
And finally, always lift the lid of the pizza box and make sure you got the right order!
Dean J. Catino, CFP, CPRC, is a managing director and co-founder of Monument Wealth Management in Alexandria,Va., a full service investment and wealth management firm. Monument Wealth Management is backed by LPL Financial, an independent broker-dealer and Registered Investment Advisor. Monument Wealth Management has been featured in several national media sources for the past several years. Dean and Monument Wealth Management can be followed on their blog at Off The Wall, their Twitter accounts @MonumentWealth, @DeanJCatino, and on their Facebook page. Securities offered through LPL Financial, Member FINRA/SIPC.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendation for individual. To determine which investment is appropriate please consult your financial advisor prior to investing. All performance references are historical and are not a guarantee of future results. Strategies involving asset allocation and diversification do not ensure a profit or protect against a loss.
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