May 15 — Many post-college grads, having worked hard to get that piece of paper, emerge from the hallowed halls of learning staggering under immense amounts of student debt. This can add stress to an already pressured time as recent grads come to grips with finding employment and attempting to make a dent in their student loan balance.
Shockingly, over half of college graduates expect to graduate with more than $27,000 in student loan debt. (This may also help explain why 57 percent of them plan to live with their parents for a bit following graduation.)
“Unfortunately, many students don’t learn basic money management and financial literacy skills before graduation,” said Steve Trumble, president and CEO of American Consumer Credit Counseling. “These skills are vital, and it’s important that recent college graduates get off on the right track when beginning their career by learning how to manage their finances.”
College students, too, seem to realize their financial knowledge is lacking — 76 percent report wishing they had more information and knew how to prepare for their financial futures.
Aware of the burden facing many recent grads, ACCC has developed four money management tips for those about to trade campus for the office:
Invest in retirement now. For younger workers, time and compound interest are important factors. Every year of further investment makes a big difference when it comes to building interest and wealth. Learning more about retirement now and avoiding some common retirement myths can be impactful down the line. Most companies offer 401(k) plans, and many employers will also match up to a certain percent of contributions. Investing the amount needed to obtain the maximum company match is a good strategy.
Pay off student loan debt. Developing and sticking to a solid loan repayment strategy is key, with the goal of eliminating those loans as quickly as possible. Quicker repayment means paying less interest, which will free up funds for a mortgage, new car, travel or other financial goals. The lower interest rates attached to most student loans often lead students to take their time repaying that debt, but the ACCC urges grads not to fall for that myth.
Live below one’s means. One should begin as one means to start, living below one’s means, not overspending and developing luxury habits. Commit to saving and paying off debt now, as it’s much harder to downgrade a lifestyle to accommodate budget changes than it is to life within one’s means from the start. ACCC suggests using public transportation instead of buying a car, if such services are available in the region, and possibly living with a roommate or finding a less expensive apartment. Any savings will add more room to a budget and allow excess funds to be funneled into savings.
Utilize budgeting and other technology. Millennials and the first of the Gen Z grads have access to more technology to aid in financial management and advice than ever before. Financial questions can be easily researched, and comparing different banks and credit unions is fairly simple as well. Online banking apps make keeping track of spending and paying bills much simpler, and there are many great investment apps available.
The ACCC, a 501(c)3 organization, offers free credit counseling to anyone in need of financial literacy education and money management skills. For credit and student loan counseling, call 800-769-3571 or visit their website: https://www.consumercredit.com/.