Just because your new grad is leaving the nest doesn’t mean your season of parenting them is complete. Instead, you’re entering into a new phase of parenting . . . one where you provide wisdom, advice, and guidance that will help them as they begin handling their own finances. Here are a few money management tips for beginners that you can pass along:
1. Budgeting is essential to financial success.
Whether your grad has been using a budget through their college years or not, now is the time to start! Budgeting is one of the biggest factors in having a successful relationship with money and personal finance. Depending on their first experience with using a budget, they may have felt like a budget was too restrictive. But alternatively, a budget actually gives them permission to spend money—as long as they use it wisely. There are a ton of great budgeting apps out there that can help them budget and track their spending as the month goes on.
2. Know your money tendencies.
Your personality has a big say in how you handle your money. Dave Ramsey says that people are either spenders or savers. Encouraging your graduate to know their money tendency will help them as they learn how to handle their personal finances. If they’re a free spirit, or a spender, they’ll need to learn how to reign that in as they stick to the budget. If they’re a saver, you might encourage them to learn how to spend their money wisely.
3. Debt is not a useful tool.
You’ve probably heard it said that debt is a tool that helps you get ahead. Sadly, that’s not true—especially for a brand-new budgeter learning how to handle their personal finances for the first time. If your graduate is thinking about using credit cards or personal loans, encouraging them to reconsider their options will help them succeed in the long run. And if they have a hefty amount of debt like student loans, encourage them to utilize debt payoff strategies like the debt snowball method or debt avalanche to get rid of it as fast as they can. No one wants to start out in the negative.
4. Make every opportunity count.
Whether your grad is interviewing for jobs or interviewing for graduate school, remind them that every opportunity counts. Every conversation, every meet and greet, and every opportunity to grow personally and professionally is a big deal. Networking and putting themselves out there is a huge part of joining the workforce. If they don’t reach out and make connections, they may find that landing that dream gig can be tough—especially in this job market.
5. Know your worth.
Knowing your worth is a huge part of being happy in your role at a company (or even a school). And even though you may have always preached that they can do anything they put their mind to, they probably won’t be starting out on the operating board of a major corporation. Even still, it’s important that they remember who they are and what their work is worth as they jump into the workforce for the first time. Encouraging your grad to do market research on the job position will help them a long way as they begin to interview with different companies. They’ll be able to better decipher a company that treats its employees well from one that doesn’t.
Want to help your graduate build even more financial muscle? Contact a SageSpring Wealth Partner and we can help your grad better understand the benefits of saving, investing, and handling their money wisely.
Any opinions are those of SageSpring Wealth Partners and not necessarily those of Raymond James.
This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Expressions of opinion are as of this date and are subject to change without notice.