As college students across the region receive their diplomas, there are other documents that will soon become a significant part of their lives ? bills.
For many graduates, their post-college days are the first time that they experience financial independence. With no set plan, many graduates face debt from college loans or one of many monthly expenses.
While the U.S. government estimates that the average college grad will earn $900,000 more than a non-grad in his or her lifetime, the road to financial success isn?t always simple.
“The very first thing graduates need to recognize is that the habits they start now will start to harden and solidify and could become lifelong habits,” said David Twenhafel, a certified financial planner with M&T Bank. “They need to understand how to live within their means ? being able to live on what you have and understand what your financial obligations are.”
Discussing a $20,000 to $30,000 student loan with Twenhafel, the financial adviser recommended that students develop a three-line budget: savings, spending and taxes. Through developing a record of where money goes, graduates can better understand their spending habits.
Leonard Raskin, president and chief executive officer of Wealth Advocacy Partners in Sparks, advises recent grads to take advantage of the option to pay off student loans over a longer period of time. By making minimum payments, Raskin says that the former students can save up money to use on tangible assets.
“People get all nerved up about how much they owe, but I would not worry about [student loans] being an albatross, but consider it a long-term debt that will go away with a regular payment,” Raskin said.
As far as tips, Forbes.com offers advice including saving a fixed amount each month, learning to balance short and long-term goals, planning for unexpected expenses and buying necessary insurance.
“It?s hard for college students to hear this because they are getting ready to go out in the world,” Twenhafel said. “But people a generation older did not have everything they have now when they got out of college.”
