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Money Management 301

 

Topic: Savings

I. Beginning to Save

 

We have all been told that saving money is a good thing; however too often we assume we can do it when we make more or settle down. However, saving is no different than learning a new language or starting a new workout program; the key to success is discipline and making it a habit. Learning to live  on less than you earn is a routine you should start as soon as possible as it only gets harder once you have additional personal, professional, and/or financial responsibilities. Saving can help you relieve stress when it comes to finances. If you have an unexpected expense, you know that you can take care of the cost. It is a beginning step to becoming financially independent. It will help you to afford some of life’s luxuries, such as owning a home and traveling. If you are currently working, one can begin to save by setting up a portion of their wages to be deposited directly into a savings account. You can begin with a modest amount of 3 or 5% and if able boost it up to 10% of your income. By automatically having the money sent to your savings, you will barely miss it. If you receive an expected source of income such as a gift or a tax refund, also save a portion of that extra money.  When you begin working, you will want to have at least 3-6 months of an emergency fund to cover your expenses before you start earning your regular paycheck. 

 

II. Tips for Graduates

 

  1. Buy health and dental insurance or have enough emergency money to cover the costs of an unexpected injury or illness. Insurance is beneficial because it may cover all or a portion of medical expenses.

  2. Start putting money in your employer provided retirement accounts, especially if they pledge to match your contribution dollar for dollar. This way, any money that you put in will be doubled because your employer is contributing the same amount. Ideally, you will want to put 15% of your pre-tax salary into retirement, however you should strive to maximize the match as much as possible.

  3. Don't think of your retirement account as another checking account and constantly withdraw money from it.

  4. Conservatively and thoughtfully spend on expensive lifestyle items such as furniture, cars, or electronics.

  5. When considering or comparing job offers, look at the entire compensation package such as health insurance, dental, vision, bonuses, retirement accounts, and company discounts.

  6. Invest not only financially but also in your personal developement. Putting yourself through graduate school may be just as, if not more, fruitful than buying stocks in a company.

Click on this Prezi to learn more about saving

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