Graduation is just around the corner and whether you are graduating from high school or college, a celebration is no doubt on the horizon. Graduation parties are a chance to celebrate with friends and family, and sometimes it can mean gifts — including money. Many recent grads come into a small fortune directly after graduation. The extra funds can be exciting, but it’s important to be smart with your money.
Many high school graduates haven’t made a solid attempt at saving — this is a good time to start! This money can help you with your college books, a laptop, or an array of other college expenses. College graduates should start a nest egg. Experts recommend that you save at least three months of living expenses. That’s rent, bills, groceries — anything to maintain your current standard of living. Not many recent college grads have that kind of cash saved up — get started!
Open a Savings AccountThe first step in saving money is opening a savings account. If you already have an account with us at MMFCU, you can easily do that online. There are a variety of options to choose from, including our WINcentive program. Have this account specifically set up for college expenses and/or an emergency fund.
Start a Roth IRAIf you already have a good start on a savings account, you can either add to it or you can invest! Open an IRA. To get an idea of the benefits, if you are 22-years-old and you open a Roth IRA with $100 at 8% a year, by the time you are 66, it will have grown to about $3000! That comes from starting with $100 — the more you invest, the more it grows! Visit our Retirement Central Site, or read more about it and the tax benefits it comes with here.
Overall, smart saving and spending are what will get you through your first years as an adult, so be disciplined in your finances. For more information on smart savings for young investors, check out nbcnews.com’s article Five tips for young investors.
If you need any help setting up for your future, contact us with any questions. Congratulations again on graduating, it’s a big accomplishment. We wish you the best of luck!