Tips/suggestions for graduating college students

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mcbridc4
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Joined: Thu Oct 10, 2019 12:20 pm

Tips/suggestions for graduating college students

Post by mcbridc4 » Thu Oct 10, 2019 12:34 pm

Hello!

As an upcoming college graduate, I was wondering, what are the easiest/safest ways to invest in your future and focus on paying off student loan debt at the same time?

Would it be better to focus on paying off that debt first and then jump into investments, or do something more simultaneously?

What were some things you did after you graduated that you found super helpful in paying off debt?

I know all college students would find any tips on this subject useful.

Thank you!

MarkVH0518
Posts: 69
Joined: Tue Dec 13, 2016 2:14 pm

Re: Tips/suggestions for graduating college students

Post by MarkVH0518 » Thu Oct 10, 2019 2:54 pm

Congratulations on starting BEFORE you graduate.
You've come to the right place.

The best answer to your question is here:
https://forum.mrmoneymustache.com/inves ... msg1333153

Regards,
Mark

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samsoes
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Re: Tips/suggestions for graduating college students

Post by samsoes » Thu Oct 10, 2019 3:07 pm

Marry someone really old and really rich. :moneybag
"Happiness Is Not My Companion" - Gen. Gouverneur K. Warren. | (Avatar is the statue of Gen. Warren atop Little Round Top @ Gettysburg National Military Park.)

HomeStretch
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Re: Tips/suggestions for graduating college students

Post by HomeStretch » Thu Oct 10, 2019 3:09 pm

Welcome, great time to plan!

1. Get a job
2. Make a budget, live below your means, be a savvy consumer and save 15%+ (pay yourself first).
3. Use your savings first to build an emergency fund in a high yield bank account
4. Apply for a credit card to build credit. Use it wisely, don’t overspend and pay balance in full on time every month. Stay debt free in general (pay cash for cars, etc.)
5. Pay your student loan payment on time. Refinance the student loan(s) to a lower rate, if possible.
6. Have adequate insurance (auto, health, disability) and add additional insurance as needed (life, umbrella, etc.)
7. Invest your savings in your employer retirement plan (i.e., 401k, etc.) to get the employer match (free money!)
8. Any excess savings, consider:
A) additional investing for long term (max 401k, IRA, Taxable account, HSA, etc.)
B) paying extra towards loan(s) especially if high rate
C) saving towards other shorter term goals - house, wedding, car. Don’t overspend on any of these.

Use your budget as a planning tool to accomplish all of the above. Use YNAB or another tool to keep spending on track with your budget.

ETA: check if bonuses are available if you open
bank accounts, a credit card or brokerage accounts. Doctorofcredit.com has information on available bonuses.
Last edited by HomeStretch on Thu Oct 10, 2019 6:55 pm, edited 1 time in total.

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firebirdparts
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Re: Tips/suggestions for graduating college students

Post by firebirdparts » Thu Oct 10, 2019 4:19 pm

Of course you have to live below your means. You already know that. You can either focus on making more than you spend, or spending less than you make. This is actually surprisingly hard as you will find out. If you don't master it, then none of the other financial advice will apply.

It's important to budget. We nickel and dime away a lot of money without knowing where it really went. Don't do that.

I found that putting my investments in a 401k at that age had the extra advantage that you couldn't get it back.
A fool and your money are soon partners

retired@50
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Re: Tips/suggestions for graduating college students

Post by retired@50 » Thu Oct 10, 2019 5:44 pm

Tips for graduating college students...

1. Realize that financial related companies like banks and credit card issuers are not your friend, they are a frienemy, at best. They are trying to appeal to you with their "products" like any other company. Be skeptical, and avoid credit card debt.
2. Don't be afraid to do some math once in a while. Suppose you have $5,000 in a savings account that pays 0.20% interest. How much is that per year, well, let's see. 5,000 x .002 = $10 bucks. Compare to a money market account that pays 2% interest. You'd get $100 bucks. Even though the numbers don't look all that different, .20% or 2%, one is actually TEN times greater than the other. Too many young people overlook things like this. The same is true for expense ratios on mutual funds. Do the math.
3. Read a book, or two. Get yourself a library card and check out the Boglehead recommended financial books for FREE. You remember what a library is don't you?
4. Save for your goals, and yes, retirement is one of your goals.
5. Learn at least a little bit about taxes, since mistakes in this area can be costly. Try doing your own taxes before hiring someone, just to see if it's really over your head.
Regards,

itsgot8
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Re: Tips/suggestions for graduating college students

Post by itsgot8 » Fri Oct 11, 2019 11:53 am

I recommend reading "If You Can" by William Bernstein.

http://tuttle.merc.iastate.edu/Bernstein_If_You_Can.pdf

Jack FFR1846
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Re: Tips/suggestions for graduating college students

Post by Jack FFR1846 » Fri Oct 11, 2019 12:09 pm

What I did at my first engineering job...... I worked nights and weekends at a gas station.
Bogle: Smart Beta is stupid

ncbill
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Re: Tips/suggestions for graduating college students

Post by ncbill » Sat Oct 12, 2019 12:06 pm

mcbridc4 wrote:
Thu Oct 10, 2019 12:34 pm
Hello!

As an upcoming college graduate, I was wondering, what are the easiest/safest ways to invest in your future and focus on paying off student loan debt at the same time?

Would it be better to focus on paying off that debt first and then jump into investments, or do something more simultaneously?

What were some things you did after you graduated that you found super helpful in paying off debt?

I know all college students would find any tips on this subject useful.

Thank you!
In the U.S. with a job offer already?

Serving in the National Guard will help pay down your student loans so you can put more into retirement savings:

https://www.nationalguard.com/tools/stu ... nt-program

https://jobs.nationalguard.com/ngb/blog ... ent-loans/

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StormShadow
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Re: Tips/suggestions for graduating college students

Post by StormShadow » Sat Oct 12, 2019 12:16 pm

mcbridc4 wrote:
Thu Oct 10, 2019 12:34 pm
Hello!

As an upcoming college graduate, I was wondering, what are the easiest/safest ways to invest in your future and focus on paying off student loan debt at the same time?

Would it be better to focus on paying off that debt first and then jump into investments, or do something more simultaneously?

What were some things you did after you graduated that you found super helpful in paying off debt?

I know all college students would find any tips on this subject useful.

Thank you!
Focus on your career. First and foremost that should be your priority coming out of college.

Yes, live within your means, pay down your loans and save for retirement. That’s all fine, but it starts first with the job.

a_movable_life
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Re: Tips/suggestions for graduating college students

Post by a_movable_life » Sat Oct 12, 2019 3:17 pm

Generally getting a shiny new car is not a great plan. My first job everyone had shiny cars from "Luxury" marques even though we were all under 25 except for me and the 30 something family guy. Not having a 300-500 dollar a month car note really gave me options.

Not doing the math to knock down student loan debt or step up investing in the 457/403b/401K. I should have paid off the loans a little slower and saved a little more each year. Especially if you are going to be right around the cut off for the student loan interest deduction.

Investor1954
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Re: Tips/suggestions for graduating college students

Post by Investor1954 » Mon Oct 14, 2019 9:25 am

I think it’s a great idea to start your retirement savings early, having money come straight out of your paycheck from the very start makes it routine. Even if you can’t start saving a huge amount, you can increase your retirement contributions later as you progress through your career. You commit to paying yourself first. The miracle of compound interest will grow your retirement account sufficiently to provide the highly satisfactory lifestyle in retirement in just a few decades. I would first invest in my employer’s retirement plan, contributing at least enough to get the full match, ideally contributing 15% of my salary. I would select a fund that mimics the S&P 500, or even a targeted retirement date fund, e.g. 2050 Fund. I would attempt to pay down my student loan as fast as possible, but I don’t know the balance, so fast may not be possible. One of the things I did after I graduated was becoming a self-serving and thrifty person, living well within my means. I also worked a second job when possible.

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