Summer, Graduation, and Planning for the Future
With the school year rapidly coming to a close, that means that for many people, a graduation- from high school, college or graduate school, is around the corner. Perhaps you are the graduate- both excited for the new chapter and feeling some trepidation about what is next, or the friend or relative attending a graduation to wish the new graduate well at this momentous occasion. What does this have to do with finances, and how can you prepare?
If you are the graduate, this is the right time to take stock:
1) Are you joining the workforce or going on to higher education? Maybe you have been working while in school, and now will have more free time? Some thoughts…
a. There is no “cookie-cutter” way to capture all of the possible approaches for a new graduate to experience life, but one thing is for sure- this is a threshold moment that you are passing through and it will almost always have an impact on either your income, your time, or both.
b. Taking the time to reflect on all that you have accomplished (yay!!) and what you want the next step to look like is really important. But also, if you don’t know what is next for you, don’t panic!
c. Most of us have many different twists and turns in our professional and academic journey. The important thing is that you do something, like test the waters of a new job or additional education, and see what you think. It can be paralyzing to feel like this next step determines the rest of your life, but it really doesn’t. It is just another data point, and if you don’t like the way you are heading you can course correct later.
2) What about debt? Are you about to take on a bunch of student loans- or about to start paying them off? Are you debating between pursuing a trade or going to college? Work or grad school? So many choices! While following your heart in pursuing what your passion is should be part of the equation, there is more to consider. Before you burden yourself with loans that can take years to pay off, take a hard look at the income potential from the likely job you will get. There are many people who are in jobs that didn’t require a college degree, paying off mountains of debt, because they thought a lot about what they want to major in but not a lot about the job that may (or may not) follow. If that is where you are, you still have options! Today there are numerous alternatives, like programming boot camps that can get you started in the world of tech, irrespective of your degree (or lack thereof). There are trades that you can get into without too much cost of training, and there is the military (the original boot camp!) which provides excellent training and a wonderful way of life if that is what interests you.
3) Lifestyle in this new chapter is also something to be considered, mindfully. If this is your first time in the workforce, it may take a little while to calibrate the costs of living to your new income. Treading carefully on spending commitments (maybe now is not the best time to buy a new sportscar!) and see how well you can cover your expenditures is prudent. Maybe you can get roommates or even live at home for a period of time. There is definitely not a “one size fits all”- but making decisions proactively that will allow you to prevent undue stress about life and money is always good. Now is a good time to remember that money can’t buy happiness and the best things in life are in fact, free :)
4) It may feel completely out of step with being a new graduate, but now is exactly the right time to think about your future financial goals and in particular, retirement. I realize you may be a young adult, but the sooner you can get into the habit of saving, taking advantage of all of the retirement benefits your employer offers, and otherwise having a plan for all of the things you want to achieve in life, the easier it is going to be to get there. You may feel that you don’t know enough about personal finance to put a plan together or that you can’t afford a financial advisor to get help. But the truth is that you can do both. I would urge you to investigate Pefin to learn how you can get affordable insights on how to plan your finances today and in the future- how to save, invest, pay down debt and otherwise plan for what matters in your life.
If you are a person celebrating the graduation of a loved one, there are really two things to consider:
1) How can you help the graduate on this next phase of their journey? Sharing with them your experience of career planning, budgeting, financial planning and more are all ways that your knowledge and life lessons can benefit someone else. Consider writing a “top 10 lessons I learned” that you can give as a gift to the graduate. Likewise, consider a gift like Pefin that provides practical financial education and ways for the new graduate to get a handle on their money situation, how to pay down debt and so much more.
2) You may be struggling with your own finances, and having a graduation to attend — which may involve travel, buying new clothes, and giving a gift — could be causing stress in your world as well. Note that a meaningful graduation gift (see 1 above) that doesn’t break the bank is possible. In addition, if you can’t afford to make the trip to the graduation it may be best to skip it- but etiquette dictates you provide a gift — so here are some more gift ideas for any budget. There is almost always a solution once we change the narrative that things must be done a certain way. Keep the end goal in mind and innovate!
Here is to celebrating new life stages and to making the most of all that life has in store!
