Top 10 Money Tips for New Graduates

Many people who graduated years ago probably wish they could go back and do a few things over. Most financial challenges can be avoided 

by doing things in a careful way. Adopting healthy finance habits can make your future a lot easier and more enjoyable. ​​

On the other hand, unhealthy financial habits can create challenges that take years of work to fully recover. So, get your adulthood started on a positive financial path from the beginning.
 
Consider incorporating these tips into your financial life as an adult:
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1.  Read a basic book on personal finance. Good personal finance habits aren’t complicated, but they’re very important. They’re also most effective when started early. Get a good book on this topic and read all about it. Then actually follow the advice.

2.  Create a simple budget. Consider your salary and then put together a budget that makes sense for your income and expenses. Remember to set aside some money for savings and investing each month.

3.  Avoid debt. Poor spending habits can cause challenging situations quickly. Avoid saddling yourself with debt. A possible exception is taking out a loan to buy a home. Debt is a dream killer because it takes years to resolve.

4.  Reduce your current debt. Few things feel better than being debt-free. Your debt is a barrier to fully enjoying your future. Set up a plan to get out of debt. You’ll be glad you did!

5.  Create an emergency fund. Start with the goal of setting aside three months of living expenses. If you should ever require it, you’ll be prepared and grateful to have it. 

6.  Begin investing as soon as possible. The greatest financial leverage young adults have is time. Even small investments can grow into incredible sums given enough time. Educate yourself about stocks and bonds and get started today.

7.  Take full advantage of tax-deferred retirement accounts. It’s hard to find a better deal than a 401(k) available through your employer. Between the matching, tax deductions and tax-deferred growth, you won’t find a better investing deal around. Remember to investigate the different IRA offerings, too.

8.  Leave your 401(k) alone. Many young adults come up with a reason to dip into their retirement accounts, under the guise of having enough time to make up for it later. This is a huge mistake. You’re better off doing without than having to raid your retirement funds.

9.  Secure health insurance. No country has higher medical costs than the US. Because of this, many bankruptcies are due to medical expenses. Illnesses and accidents happen, so be prepared. Everyone requires health insurance to mitigate this substantial risk.

10.  Spend your money on worthwhile experiences. You can’t just save like a miser. Life is short, so get out and enjoy it. It’s okay to spend some money on enjoyable experiences without being afraid. This is a big part of the reason you earn money in the first place.

​Avoid the many pitfalls of developing poor personal finance habits. Mistakes made at this point in your life are recoverable, but the entire experience can still be extremely challenging.
 
Good habits ensure good outcomes. Your financial future can be great, if you’re willing to put a smart plan into action right now. There’s no reason to repeat the mistakes of others.
 
Implement these 10 tips and you’ll find your financial life will have a minimal amount of drama and challenges. Avoiding mistakes is a huge part of being successful.