For the Graduates [Post 19]

Congrats on graduating college (or high school) and getting your career underway! If you are wanting to get your finances in order but don’t know where to start, hopefully the following can get you started.

1. Create a Budget

Building a budget isn’t exciting, but determining how much is available to allocate to hobbies, vacations, and other entertainment can be.

This “fun money” amount can be determined by the following equation:

Gross Pay (Salary)

- Taxes and other paycheck deductions

= Net Pay (Take Home Pay)

- Major expenses and obligations (rent, food, gas, loans, savings, etc.)

= ”Fun Money” remaining

Neglecting to budget can create problems if you don’t have a plan for upcoming purchases and expenses.

2. Start Investing Early

Compound interest can be thought of as the 8th wonder of the world, the more time you give your money to compound the faster it can grow. Consider a Roth IRA or Roth 401k to get started on saving for retirement.

The following 40-year graph1 shows $6,500 yearly contributions as cash (shown in blue) and $6,500 yearly contributions with hypothetical 9% growth in the stock market (shown in orange). Investing can be an exponential game in the long run.

While there is definitely risk investing in the stock market - there is also opportunity cost associated with only holding cash.

3. Build Credit

Having credit history may be necessary to rent an apartment, buy a car, or take out other loans. Credit can be established by opening a credit card and paying off the balance each month.

Be careful to avoid credit card debt if possible as interest on a credit card is normally much higher than other interest rates and can impact your credit score.

4. Find the Right Mentors

Securing the highest salary possible right out of school might sound like a good idea but may quickly have you seeking new employment if other aspects of the role aren’t enjoyable.

Prioritizing great mentorship and experiences can more effectively propel your career than other glamorous factors such as pay.

1. For illustrative purposes only, not intended to represent any particular investment or investment strategy.

The commentary of this domain reflects only the personal opinions of the creator(s) and are published independently of services provided by or in connection to KEB Wealth Advisors. No material on this website should be taken as tax, legal or investment advice. Any mention of a specific security is not a recommendation. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.