Making enough money is just the beginning—then you have to manage it. Everyone, from recent college graduates to those well established in their careers, can reap the benefits of advancing their personal financial literacy.
Financial literacy is critical
Everyone knows that money can be hard. Making enough of it is just the beginning—then you have to manage it. Millennials have their share of money regrets, including credit card debt, lack of financial planning and, of course, the big one: college debt.
Now, many recent college graduates are also carrying significant educational debt into the next chapter of their lives. The national average for college debt sits around $37,000 per borrower. Respondents to a recent CollegeFinance survey had graduated with an average of $22,000 in student loan debt, have $14K left to pay and expect to complete repayment within six to seven years.
College debt affects more than just your financial outlook. Overall, 27% of the CollegeFinance respondents say their student loans made career changes difficult, including 36% of those owing $51,000 or more. Three in 10 say the same for taking a career risk, including 44% of those with $51,000 or more in outstanding student loan debt.
“Managing significant student loans brings additional levels of stress,” says Ryan McPherson, Director of Coaching at SmartPath. “This can be amplified if the recent graduate’s income is not commensurate with her/his required debt payments. Higher debt burdens may mean that graduates are taking longer to save up emergency funds and home down payments.”
5 tips to be smarter with money
Of course, it’s not just young people who could benefit from a little extra awareness in the area of personal finance. “As a whole, Americans could use additional money management education for different life events, e.g., handling student loans, buying a home, financially preparing for kids, paying taxes and planning for retirement,” says McPherson.
“Employers have the opportunity to help with this problem by incorporating financial wellness into their HR benefits packages to help educate their employees on money management skills,” he says. But workers shouldn’t wait for their employer to take the first steps toward better financial literacy. McPherson offers five quick-hit tips that college graduates—and the rest of us—can implement immediately to create a better financial future:
- Spend less than you make. Seriously. “This is the basis of any long-term financial success,” says McPherson. Of course, to spend less than what you make, you’ll need to keep track of both numbers. Budgeting software like Mint, YouNeedABudget and others can help you stay on top of …….