June is graduation season, and for those who are moving on to higher education or entering the workforce for the first time, it is important to carry the timeless wisdom that comes from beyond the textbooks. Moreover, we could all use some reminders of the lessons that we sometimes overlook in our finances. Here are four:
1. Start saving for retirement as soon as you possibly can.
Many jobs today offer retirement savings plans, such as 401(k)s. Employers will often match a percentage of the contributions that you make, so you have an immediate multiplier just by putting money into the plan. Don’t ignore this opportunity, regardless of your stage of planning.
2. Piling up debt really hurts.
Especially for the college graduates with student loans, but even for those who have excessive mortgages and big credit card bills, having debt is a huge burden. Work to eliminate the high-interest debts, and if you cannot afford something, then do not go deep into debt to buy it. If you want something that is nicer, save for it now and let interest work to your advantage instead of against you.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
3. A little self-control goes a long way.
Do you really need those luxurious things that you see in the media and in the stores? A good policy is to wait for three weeks after you think that you need something that you want. If your feelings change and make you look at something else, then start the clock again. Another idea is to count out the cash on a table for what you want to buy instead of running to the credit card. The more expensive the item, the more cash you will see on the table. You may change your mind after seeing the money in that way.
4. The future is closer than you think.
You may be reading this letter as a recent graduate, or you may read it wondering where all the years went since you graduated. If you are trying to find a job, make connections, learn a skill/language, save money, reduce debt or complete a big project, regardless of how hard the task may appear, do it now. The last thing you want is to find your future as a series of missed opportunities and closed doors, so empower yourself today.
Did you know? Now could be a great time to find out your credit score and see your credit report, especially if you are moving into a new place or on your own for the first time. The earlier that you can find out if there are errors, excess credit card applications, late payments or other issues, the quicker you can work to repair them.
-
Adoption Tax Credit 2024: What You Need to KnowTax Credits The federal adoption tax credit is slightly higher for 2024. Here’s what you can claim under the tax break designed to help grow your family.
-
Start-ups Trying to Solve the World’s Hardest ProblemsThe Letter More investors are interested in companies working on breakthrough science to tackle huge societal challenges. The field of deep tech has major tailwinds, too.
-
The Tax Rules to Consider Before Buying an AnnuityAnnuities can play a valuable role in your retirement plan — as long as the tax implications have been properly factored in. Here's an outline of the key rules.
-
Beware of 'Buy a Business' Coaching ScamsJust because someone says they can make you rich by helping you buy the business of your dreams doesn’t mean they actually have the expertise to do that.
-
What You Need to Know About Taxes in a Gray DivorceIf you're not careful about how assets are divided or sold, you could get hit with a big tax bill.
-
Focus on These Five Critical Areas in Retirement PlanningWorried about how you'll pay for your retirement? It can help to structure your finances around five key areas: taxes, income, medical, legacy and investments.
-
Is Downsizing Right for Your Retirement?The lower costs of a smaller home in retirement might sound appealing, but be ready for the trade-offs that come with making this big decision.
-
Three Tips for Managing Your Election-Related StressAs Election Day approaches fast, consider taking some steps to keep your anxiety and expectations under control.
-
Market Dips Can Be Retirement Busters: Ways to Guard YourselfIt's harder for retirees to bounce back from stock downturns, so you need an income strategy (and a portfolio) that's resilient.Chris
-
Inheritance, Simplified: How Assets Are Passed DownHere's a breakdown of the logistics, including probate, taxes and who gets what if you die without a will.
