What’s one of the best parts about graduating from college?
Morningstar’s columnists and specialists are here to tell you what they wish they knew when they graduated. Here are their words of wisdom, personal finance tips, and more for college graduates.
Saving Money Tip: Save When You Can, Where You Can
“When you’re just starting out, saving for retirement seems hopelessly abstract. It’s incredibly hard to prioritize it over other financial goals such as buying a first home or taking a big trip. So here’s some advice: As much as it’s valuable to start saving for retirement as early as you can, simultaneously set some shorter-term financial goals and hit them. Scoring smaller financial victories will help you buy into the value of saving in a way that saving for retirement—a far off, abstract goal—may not.”
—Christine Benz, director of personal finance and retirement planning
“Whether your company offers a 401(k) or a 403(b) plan, invest in it as soon as you can. By doing so, you’re setting yourself up for investment success. How much you save and how long you save are the one-two punch of a winning approach for building wealth for retirement. And if your company matches some or all of your contribution, all the better!
“Appropriately invest your retirement plan contributions. Don’t let your contributions sit in a low interest cashlike account because you don’t know where to invest them. If your company doesn’t default you into the plan’s target-date vehicle that’s closest to your retirement date (which may be hard to think about, considering you’re just entering the workforce), put the money there yourself. As time goes on and you build your retirement kitty, you may decide to diversify beyond the target-date option. But it’s the best place to start.”
—Susan Dziubinski, director of content
“Contribute to your 401(k) as soon as you can. Even if you think you can’t afford it. It doesn’t hurt as much if it comes out of your check before you see it!”
—Sylvia Hauser, senior copy editor