10 Cash Commandments For New Graduates
Editors Note: This article was originally published on Cassius on May 22, 2018.
Graduating—whether from high school, college or grad school—is one of the biggest milestones in life. It marks the start of a new chapter. The crazy thing is that while folks give graduates advice about a lot of things, money, one of the biggest responsibilities, is rarely discussed. Talking about finances is often considered taboo, or too personal. Unfortunately, the silence is deadly. We’ve all heard statistics that show the average student debt is around $30,000. Add in credit card debt, which averages around $15,000 per household, and it’s easy to see how folks end up living paycheck to paycheck. Staying out of the debt cycle and making smarter financial choices overall isn’t that hard. The problem is that too many folks don’t start talking about money until they’re in the hole, or realize that they’re way off a new financial mark. There’s only one way to win. People have to start sharing what they know.
“When you’re in school all of the focus is on graduation, and there are a lot of support systems, from student loans to parents to part-time jobs,” says personal finance expert Ash Cash. “That all changes post-graduation, so the earlier you develop good financial habits, the better off you are. You can live the life you want v. playing catch up.”
Regardless of one’s personal goals, there are some universal best practices when it comes to money. Here are the 10 things Cash says all grads should consider before they deposit that first check.
1. LIVE BELOW YOUR MEANS
After years of school, you likely want to do it big because you’re finally making money. While living the high life is great, saving money is the best move. In order to do that you have to live below your means. Cash suggests living on 80 percent of your income, so you can always save 20 percent. In order to do that all of your bills— from rent or mortgage to discretionary cash and vacations— need to take up less than 80 percent of your income. Once you stretch this muscle you’ll be a great saver. The habit will grant you more financial freedom and less stress. As an adult, you will need money for everything from emergencies to down payments. Do this and you will stay ready.