Tips for the newly graduated

Tips for the newly graduated

As the newly-minted class of 2016 takes the stage, no doubt there are plenty of commencement speeches being made that contain life advice of the “wear sunscreen” persuasion. One vital subject that probably isn’t getting much coverage is investing.

Taken at face value, money and how to manage it are pretty mundane, so it’s not surprising if calling your broker isn’t the first thing on your mind as you throw your cap into the air, hug your friends and head out for lunch. But the fact remains that an understanding about how to navigate, manage and invest your money well will serve you well for years to come. Starting now.

Given the challenging landscape the class of 2016 faces, Tina Powell, Chief Executive Officer of She Capital, shared five tips with us. Despite obstacles like crushing student loan debt, a dismal job market and the perils of potentially living in your parents’ basement, Powell believes you can do it. Here are her key points:

1. Aggressively attack student and credit card debt.

Practically everyone has one or both of these debts on the books coming out of school. Before you invest, you must aggressively attack student loans and credit card debt. If you have large debts, immediately investing is a dysfunctional and backward strategy for building wealth, according to Powell. “Grads need to know that missing and being late, even on one payment, will wreak havoc on their credit score and their ability to borrow money at the lowest interest rates,” she said. “This might not show up now, but will haunt them in years to come.”

2. Create an emergency fund.

While there is no rule of thumb or “one size fits all” criteria when it comes to having an emergency fund, it can make all the difference if unexpected expenses crop up. These funds typically have anywhere from three-to-12 months worth of practical living expenses stored in them and are easy to access. If you’re at a loss for how to calculate how much to save up, consider this question: if you lost your job today, how much money would you like to have available in order to see you through to your next gig?

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