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August 27, 2019

Advice for College Graduates

Summer 2019 Quarterly Newsletter

Author: Mark Dillon, CFP®

Estimated Read Time: 3 minutes


Many of my clients, not to mention myself, have children who recently graduated from college and just entered the working world. It has been a great pleasure to meet with some of these graduates seeking guidance about how to handle their finances as they begin to earn an income. I think I can speak on behalf of the other advisors in our office that it is our fiduciary responsibility to boost financial literacy and help our clients’ children and grandchildren get off on the right foot.


The good news is that financial literacy is not complicated. Listed below are ten principles young graduates should consider. If they seem obvious, congratulations on your financial savvy. Please do your part by passing this on to any recent graduates. It may be the most valuable gift they receive.


  1. Cash is king: The first goal for any graduate is to accumulate some emergency savings. A minimum of six months of living expenses while working is a good start.
  2. Know how much is coming in and going out: Keep track of how much money you spend and what you spend it on. This is called budgeting.
  3. Avoid bad debt: The only step here that requires you to not do something is often the hardest. Credit card debt is your worst enemy. If you use a credit card, pay it off in full each month.
  4. Save systematically: Once you have a sufficient emergency cash fund, put savings in the same category as your electric bill, which is mandatory and automatic.
  5. Maximize your 401(k) or your equivalent retirement plan: While you are at an entry level income and thus a lower tax bracket, choose the Roth 401(k) option if available. Your ultimate goal is to make the maximum annual contribution of $19,000. If you can’t afford to maximize it, start out with the minimum amount that your employer will match.
  6. Take advantage of your HSA plan if available: Health Savings Accounts allow you to pay for medical expenses with before-tax dollars, some employers will contribute on your behalf and if you don’t use it now, you can use it in retirement.
  7. Don’t overspend: If all you can afford is a $2,000 car, buy a $2,000 car. You can buy a more expensive one after you have saved more.
  8. Plan for surprises with insurance: You most likely do not need life insurance at this point, but protect yourself with renter’s insurance, sufficient auto coverage and an umbrella policy.
  9. Change your mindset: You are saving for emergencies and you are investing for retirement. Your allocation in your retirement accounts should be heavily weighted in equities for the long term.
  10. Set Goals: Identify your short, medium and long-term goals and plan or save appropriately for them.


Of course if you have questions about any of these, feel free to contact your advisor. Good luck!


This article was featured in our Summer 2019 Quarterly Newsletter available here: 

College Planning, Financial Literacy

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