Economic Prosperity for College Grads

May 29, 2009 – 1:43 pm – No Comment

You just spent the last four years preparing for the rest of your life. As the Rodney Atkins song says, you “majored in beer and girls”. (If you did, you are part of 5.4 million college bingers. Be not ashamed.) You spent five long minutes every week writing answers on every part of your body that you can pull out of your clothes to look at during the exam. Okay, maybe some of that is exaggerated. I really do hope you did the best you could throughout those four years of college and did your best to prepare yourself for the next 45 years of your life (or more, these days).

One thing they probably did not teach you is money management. You will have a mortgage, car payment, marriage (likely complete with two or three curtain climbers), food, etc. The list goes on. Money does not buy happiness, but if you hang on to a little of it and manage it wisely, you will be a much happier and successful person. The first step is learning how to manage that dollar no matter how big a hole it is burning in your pocket.

The first thing you need to learn is that we do not have control. We can stock all the money away that we want, invest as much as we can, but the truth is that the government and the free market have total control. All we can do is try to steer clear of the obstacles the economy throws in our way. Try to plan ahead and give yourself a financial cushion. Very much like the commercials played here in Maryland for Baltimore’s St. Joseph’s Hospital concerning their heart department‘s heart attack risk assessment program. It begins with a man they introduce by name. They mention all the things he does right– he jogs every day, eats right, smoke free and alcohol free, but in three days he will have a massive heart attack. You could do everything right but then have a financial attack. Just learn to do the absolute best you can with every dollar you earn.

Work hard at all the right things. Be proactive. Be ambitious. Raise your hand for new challenges. Experience new things. Beef up that résumé. Do something you like that is still financially rewarding. Network properly in your industry. Most importantly, look for good benefits. Example: many employers reward their employees with stock portfolios (401k) which will likely grow. Live your life toward one central financial and occupational goal and live up to it.

Decide what “rich” means to you. There is another country music song that says that you do not have to make a million dollars if you are putting food on the table and providing for your family. If you only make $60,000 per year but it pays for that townhouse you bought in Hanover, PA, pays the bills, buys the bread, and allows you a little money left over to stock away and you are okay with that, you have succeeded. Just remember to live under your means and put those extra few bucks away every month.

Understand the fiscally responsible way to live. Pay off credit cards on time, more than the monthly payment; total balance if you can. Banks should be paying you interest, not the other way around. If you are paying interest, you are wasting money. Treat your credit score like a baby. One mistake could kill that poor child. One mistake in your credit could be the difference in that loan you want. Learn how to manage your money properly. Get down to the dime if possible in your budget. As mentioned in a previous article, there are easy ways to budget. Some people swear by the envelope method. Understand the cost-benefit analysis of your investments. Take good care of your health. Remember that a million dollars is more than enough for retirement. The investment companies want you to invest a million with them but in reality, $350,000 is plenty if you are fiscally responsible. Last but not least, be giving and grateful. This all leads not only to happiness but financial security.