Give the Gift of Financial Freedom to Your College Grad
With graduations just around the corner it is a perfect time to think about a meaningful gift to give a soon to be college graduate in your life. For a really special graduate, I challenge you to think outside of the box, or traditional envelope of cash, and consider the gift of financial planning. While every graduate has a unique situation, there are best practices that can set up an individual for financial health, freedom and stability. Below are some of my favorite tips for recent graduates:
Create a holistic financial plan – think Big
Creating a comprehensive financial plan may seem like a luxury that a recent grad living paycheck to paycheck cannot afford. However, by thinking big about their longer-term goals, your recent grad can start taking steps today that will ensure a brighter future tomorrow. Here are some key considerations for every recent graduate starting their first job; How much rent can you afford, what kind of health care plan should you choose, can you afford to buy a car, what’s a good price for car insurance, how should you allocate tax deductions in your paycheck, how to start tackling student loans and retirement and when should you start thinking about longer term goals like purchasing a house one day?
Create a budget – don’t let FOMO dig you into debt!
Breaking down the plan a bit further, nothing beats a basic budget to start a new graduate on the right path. The budget can help you implement your larger financial plans while figuring out how to live on your own for the first time. Essentially, you don’t want to let FOMO (Fear of Missing Out for anyone who missed it) push you to live over your means and turn to credit cards to supplement your income. It’s easy to scroll through Instagram and see your friends on really cool vacations or out on enviable adventures, but remember your long game and find a way to have fun today that helps you achieve your financial goals. No one wants to spend their 30s digging out of bad decisions made in their 20s and you will be so happy you set yourself up for success with a good budget and financial plan.
Establish a Freedom Fund – stressing about being broke is not fun, make a Freedom Fund instead
Pay yourself first by establishing a freedom fund so you don’t have to rely on credit cards to supplement your living costs or for things like unexpected car repairs or travel expenses. Put this in your budget and once you have your cash freedom fund in place then you will have peace of mind and be in a better position to tackle your debt.
Tackle the debt – I love Debt! (said no one ever)
If you have student loan debt coming out of college a financial planner can help unravel some of the complexities and help establish a plan to tackle the debt effectively. For instance do you consolidate or not and what are the best options for repayment plans and how can you start to plan for graduate school?
Retirement Planning – the time to start is NOW
Retirement planning is a must have not a nice to have. Figure out a way to work it into your budget. Starting your retirement planning in your 20s instead of your 30s can have massive impact because of compounding interest. Not having enough money is a common reason 20 something’s will cite for not starting their retirement but make it a must do and you will thank yourself later. And always, always take advantage if your company offers a match.
After providing years of love, advice and guidance to get a college graduate to this special milestone, gift the gift that puts your loved one on the path to financial success. With a financial plan your graduate will get the tools and support they need to follow their dreams with confidence and they will always be grateful for this empowering gift.
Let Plum Tree Financial help you make this gift a reality. Call us today at 484.875.3072 and start your grad off right and read more about how we help here.