How To Accumulate Wealth Like A Responsible Adult
Fresh out of college, are ya? Well, the graduation ceremony is now just a memory (you looked great in that cap and gown!). The congratulatory emails, notes, and texts have stopped coming in, and suddenly you realize that rather than focusing on how to balance school and parties, you need to focus on your bank account balance instead. Goodbye partying, hello adulting.
According to Nitrocollege.com, the average student loan burden comes in at around $37,172, and the average monthly student loan bill is a whopping $393 per month. But if you set your mind to making a savings plan right out of the gate after college, you’ll stand a good chance of creating a positive financial future. Here are some money-savvy moves that could pave the way for great dividends down the road.
Focus on your student loan debt
That six-month grace period you’re given to start paying off your student loan debt? Ignore it from day one. According to Joy Alford-Brand, a bankruptcy attorney in North Carolina and author of Money Basics, Keeping It And Growing It: What I Learned About Money As A Bankruptcy Attorney, “Your mentality should be the sooner you can get out of debt, the better.” Obtain a complete history of your federal student loan by visiting the Department of Education’s database at Studentaid.ed.gov so you know exactly how much you owe. And, if possible, make extra payments when you can to save on interest rates over the life of the loan.
Check your credit report
As soon as you graduate, check your credit score health. A poor credit score can impact your ability to obtain certain employment, successfully lease an apartment, or secure a loan. Obtain a free copy of your credit score at annualcreditreport.com. By paying bills on time and managing debt correctly, you can start building a credit score that will help you get better loans and credit card terms moving forward.
Maintain the right mindset on savings and debt
Living for the moment can cost you over time. Keep in mind that savings should be a long-term habit and debt should be a short-term situation. Try to consistently eliminate debt in chunks, which might require putting the brakes on some immediate desires, like stopping for that Nitro Cold Brew with Salted Cream Cold Foam every morning.
Build wealth, dollar by dollar
Patrick Ford, director of wealth management at Brown Wealth Management in San Diego, California, advises signing up for automatic retirement savings at work right away. You won’t miss the money if you don’t see it hit your paycheck in the first place, and you won’t need to remember to save each month for your retirement. Yes, retirement may be a long way off, but that’s all the more reason to start saving as soon as possible, because you’ll have more time to accumulate wealth.
Give yourself a financial checkup
Checking on your financial health can be just as important as checking on your physical, mental, and emotional health. Understanding and empowering yourself financially can lead to freedom, flexibility, and peace of mind in the future, as well as a sound, long-term financial plan that won’t be such a hard pill to swallow.