lightsey

going to be a new grad soon, and don't really know what to do financially. will have a job with decent pay, and also decent student loans to pay off, car payments, etc. any tips for how to handle starting out?

Yakk

Learn how to budget, if you don't already. Know where your money is going.

Make certain you are having the correct amount of tax withheld from your paychecks. You don't want to run into an unexpected 'problem' at tax time. (theoretically, if not enough is being withheld, you could just budget for the hit)

Get rid of high-interest-rate debts before low-interest-rate debts. Which is a worse rate, your student loan or your car loan? Your student loans may change rates after a while of you not being a student. I think that complicates things. The naive answer is to pay off the debt with the lowest current interest rate, but that might not be correct.

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Last edited by JHVH : 10-29-4004 BC at 09:00 PM. Reason: Time for a rest.

lightsey

yeah, i plan to consolidate my student loans and get as low an interest rate i can...and i am searching for something to help with budgeting (know any good software, ie. quicken?).

i wish i could find some kind of chart or something that could suggest some starting off percentages, like how much to allocate to rent/living expenses, credit card payments, entertainment, etc., especially since i plan to contribute fully to a 401k. i also want to invest, maybe in some type of mutual fund.

i have ideas about what i want to do with my money, but nothing to tell me how to do it or if i can afford to. any additional suggestions would be appreciated

Mobo123

Stay away from credit cards. I have done so many ch. 7 bankruptcies in my legal practice, i want to throw up. I did one last week, over $260,000 in consumer debt. $12,000 alone to the disney store. unfuckingbelieveable.

If your credit is decent, you will get bombarded with credit cards offers. STAY AWAY FROM THEM!!!!!!!!!!!!! Get one or two, for emergency purposes only. ALWAYS pay off your credit cards EVERY MONTH!!!!!!!

If you cant pay cash for something, you cant afford it. Resist the temptation.

If you live by this philosophy, you will be fine.

jorgelito

A good rule of thumb is:

Before you cash/deposit your check (actually, try to get Direct Deposit):
Put 10% of your income into savings/money market.

Rent: 1/3 of salary
Then budget accordingly. Only you know yourself.

It really helps to write it all down and calculate it out. MS Excel is good enough to make a chart or budget sheet. That way you can see exactly where your money is going.

Try and contribute the max to your 401K, especially if there is matching. It's basically free money.

Go to www.bankrate.com and spend some timne browsing there. You can also goto your school's Financial Aid office or Career Center. They'll be more than happy to give you info. Sometimes schools provide free seminars, workshops on finance etc.

Good Luck!

thrsn0730

I'll second the 401k suggestion. Don't skimp there, unless you plan on hitting the lottery.

lightsey

well, i definitely plan on sinking a good amount into my 401k, especially since the employer match is dollar-for-dollar.

concerning credit cards, ive never had one (always used a debit card), so ive never had to deal with the monthly payment of one. is there some rule of thumb concerning how much your credit card bill should be each month? maybe a better question is, when should i buy something with "cash" (ie. have total purchase amount available in my account, and paying with a check or debit card), and when should i buy something on credit?

also, im still in the dark concerning investing....like i said, im probably looking into an indexed mutual fund, but im not sure how much i could (or should) put into it.

Yakk

You should not be paying interest on your credit cards.

Treat your credit card as a debit card. Pay it off in full at the end of the month, and be always aware how much you have on it.

Paying any credit card interest is a huge massive waste of money. It gets addictive, and it is the #1 way that people go into bankruptcy.

The only possible justification for paying credit card interest is a huge, massive emergency, before you have managed to build up an emergency fund.

If you top off your retirement fund, keep a relatively liquid emergency fund around, and don't pay any credit card interest ever, you will be doing good.

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Last edited by JHVH : 10-29-4004 BC at 09:00 PM. Reason: Time for a rest.

roderickpsu

Another great idea would be to start dating a CPA, and she could hook you up with some skills.

NotMVH

I would get a credit card for emergencies but even if you get in the system of purchasing and paying off in full if someonething comes up and you can't make a payment you start a continues stream of barely or not being able to pay it down.

I have also graduated and working fulltime now. I found that using Microsoft Money just to analyze my spending to be quite usefull. Although I keep mental tabs on my money I don't think of some expenses as adding up in very quickly I spent a few hundred dollars without thinking twice about it. Now, I can track when such luxury expenses happen and keep myself from falling into those pitfalls.

LIMilf

Are you living at home for a while or living on your own right out of school? It might be a good idea to stay at home for 6 months to a year. Save up some cash without paying rent. Gives you the freedom to find what you want, and if you save up enough, gives you the freedom to rent vs. buy.

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