It’s been a rocky last few months for graduates, but what they all now have in common is they’ve finished their tests and received their diplomas. Thousands of students embark out into the “real” world, but are they ready to make “real” financial decisions? This is a topic that can confuse even the most well-versed adult. To help give some clarity and direction, below are three simple steps to equip graduates in mastering their financial future.
Control Your Cash
The first step to money management is knowing what funds you a have available to work with. Starting a checking or savings account can help you keep track of spending and deposits. By monitoring accounts regularly, you can recognize spending habits and ways you can possibly adjust. For example, according to ValuePenguin, Americans spend roughly $2,641 annually per person on food. Simple changes such as making meals at home can help dramatically decrease this amount and allow you to save more.
Budgeting can be extremely useful in taking control of a person’s finances. By listing out bills and then allocating anything you earn toward food, savings and other expenses like a vacation, will give you goals to track and accomplish month to month.
Save First, Spend Later
When you make a deposit into your checking or savings account, the first thing you should do is set aside what is needed for bills, necessary expenses and have an emergency fund. Emergency funds are especially important because as you enter the workforce and begin to own a car and a home, expenses can increase substantially as well as the unpredictability life can throw at you. Emergency funds are easy to create and you can start by setting aside just $20 per week.
Extra savings can also be used for exciting life events like vacations or large purchases. By proactively planning, it will be less stressful when the day comes to splurge because you know your other finances are secure.
Invest In You
You save, budget and spend to fuel your future dreams. Taking the time to think ahead will pay off in the long term. Responsibility is key in any financial situation. Taking simple steps like being consistent with your bill payments or asking for assistance when you are confused can help you develop into a well-rounded person who achieves financial and professional goals. Seeking the advice of your financial institution and being open about hardships can help you both develop a constructive relationship and will continue to fuel your trustworthy standing for years to come.
Staying on top of your finances can be daunting at first, but by keeping your finances in control, putting a priority on saving and gaining responsibility of your financial knowledge, you can enter the real world as a financially savvy individual.
Written by: Alan Althouse, TruWest Credit Union
Alan Althouse is the President and CEO of TruWest Credit Union. TruWest Credit Union is headquartered in Tempe, Ariz., and operates as a cooperative to provide its members with a lifetime of quality financial services and a culture of caring for its members, employees and communities. TruWest has more than 89,000 members and assets totaling more than $1 billion. TruWest Credit Union has 13 branch locations—nine in Metro Phoenix and four in Austin, Texas. For more information, visit truwest.org.