I often give various money management tips to people in different stages of their lives. A recent college grad has different goals, needs, obstacles, and assets than a retiree with $1 million in the bank.
My name is Keith Fitz-Gerald, and I’m a well-known stock trader and teacher with lots of experience under my belt. People search out the Keith Fitz-Gerald brand when they see me on television or read interviews on the internet.
But what if you need specific advice? Today, I’d like to take you through my best money management tips for college grads.
Start Investing Immediately
Don’t wait to invest. One of my best money management tips is to take advantage of every good opportunity that comes your way, especially when you’re young. You have a lower risk tolerance, but your college experience has taught you to be selective and discerning.
In fact, this is the best time to begin growing your net worth. Maybe you don’t have a ton of money in the bank, but you don’t need it. Investing with just a few hundred dollars will get you started, at which point you can continue the growth process.
Yes, it takes time to build true wealth. You can’t get greedy. However, if you’re focused on making conservative but forward-looking decisions about your money, you’ll find yourself better prepared for retirement and major expenses.
Create a Budget Based on Sound Money Management Tips
Making a budget sounds really boring, right? It is. But it’s also essential. If you don’t know how much money is coming into your household and how much money you spend every month, how can you make good decisions about purchases?
Budgeting also allows you to see proof of your growth, which will motivate you to continue seeking a better job, investing in better companies, and making more money. Of the money management tips I give, this is the one that has the most lasting impact on investors’ and traders’ lives.
To make budgeting even more effective, share it. You’re creating accountability. Your parents, best friend, spouse, or live-in partner can review your budget, point out any room for growth, and congratulate you as you continue to build your net worth.
Your budget can be in any form you like. Write it out in a ledger, create a spreadsheet, or use a software program. It doesn’t matter. As long as you keep updating every week or month, you’ll see the trajectory of your financial situation change.
Prioritize Paying Off Debt
Debt can cripple your finances for years if you let it. Some forms of debt, such as a reasonable mortgage on a home, can be good. You’re building equity over time, and if the housing prices go up, you’ve made a formidable investment. Other types of debt, such as credit card balances, aren’t nearly as beneficial.
I’m not saying you shouldn’t use credit. In fact, I recommend it. Credit cards have security features that debit cards lack, and you can build points, miles, or other rewards. However, don’t spend more than you can pay off at the end of the billing cycle.
As a recent college grad, you likely want a lot of stuff. Remember, though, that you don’t need most of that stuff. Focus instead on saving and investing your money. My money management tips often revolve around putting your money to work for you. A new TV might be nice, but it has no long-term benefit.
If you already have debt, start paying it off immediately. Make more than the minimum payment each month, and set aside the money you would usually use for luxuries for your debt. The faster you get debt-free, the more money you’ll have to devote to investing.
Set Aside Money for Savings Every Month
Saving money is the best thing you can do for your future. You want some money in your savings account, but building up your investment account is one of the best money management tips I can provide.
Savings accounts have abysmal interest rates, so you won’t grow your wealth that way. Instead, you need to make regular contributions to your personal brokerage account as well as to your retirement account. For the former, focus on income investments. For the latter, look for longer-term investments.
Don’t Count on a Promotion or Better Job Offer
Too many college grads think they’ll get promoted or receive an amazing job soon after they graduate. Don’t count on it. Focus on what you have and work with it. Money management tips don’t work if you’re forecasting future earnings.
Establish or Improve Your Credit
You need good credit in this world. As I mentioned above, credit cards aren’t bad or evil unless you misuse them. If you have access to credit, you can take advantage of opportunities that would otherwise be denied.
Some so-called experts claim that the best money management tips include avoiding credit and debt entirely. I disagree completely. If you’re able to use credit responsibly, your credit score will grow. These days, everyone checks your credit, whether you’re applying for a job or car insurance. You want to pay the least amount possible for insurance and get the best job, so a good credit score will take you far.
Start Thinking About Retirement
When you’re a recent college grad, retirement seems like eons away. It’s kind of like picturing your senior year of high school when you’re in kindergarten. Retirement comes faster than you think, and the more money you have, the easier your post-retirement life becomes.
Long-term investments that have excellent yields will serve you well. Focus on contributing the maximum to your 401(k) so you don’t have to worry about working past retirement age if you don’t want to.
Track Your Investments Closely
Don’t let someone else manage your investments. Instead, take control of them yourself. One of the best money management tips I can provide is to make sure you know where your money is, where it’s going, and what it’s earning.
Keep a close watch on your long-term investments as well as your income investments. That way, you can change course at a moment’s notice even if your broker doesn’t agree with your choice. Remember that brokers want to earn commissions, so they don’t always have your best interests at heart.
Open a Retail Brokerage Account
Speaking of investments, you need a retail brokerage account if you want to trade stocks frequently. This account allows you to buy, sell, and short stocks at will. You might trade a lot one week, then take some time off the next. All the while, though, you’re maximizing the returns on your investment.
Each time you make a trade, you take a gamble. You’ll lose on some plays, but your goal should be to profit more often than you lose. That way, your wealth continues to grow. I’ll explain more about that in a minute.
Read reviews and test multiple brokerage accounts. Many of them exist, and all have different commission and fee structures. Ideally, you’ll want a cash brokerage account at first. Get used to buying and selling before you decide to short. Additionally, don’t trade on margin — at least not at first. It’s too risky for a young investor without much experience.
Learn From Keith Fitz-Gerald Publications
There are ways to improve your chances of profiting from these money market tips and your investments. One of them is to sign up for the Keith Fitz-Gerald publications. My newsletters help thousands of people profit wildly in the stock market, often when starting with a small trading account.
You can become my next success story.
My newsletters contain meaty, exhaustive information as well as stock tips you won’t want to miss. I’m here to maximize your profits and minimize your losses whenever I can, so don’t hesitate to join. You’ll get tons more money management tips that you can use to your advantage.
I love helping people make money, and sometimes that means dispensing advice in the form of money management tips. That’s what I hope this article provides.
Now that you’re finished, it’s time to take the next step toward building your wealth. Sign up for Money Map Report today for more money management tips. You won’t be sorry.