I read an article this morning by Charles Wheelan entitled “10 Things Your Commencement Speaker Won’t Tell You.” As a somewhat-recent-grad, I found a lot of helpful takeaways (and some bordering on absurd) in this piece, and it inspired me to reflect on the “real-world” knowledge I’ve gained. Here are 5 more things you may not hear at commencement, but are useful nonetheless, inspired by Mr. Wheelan.
1. Your money was well spent.
Dismal statistics concerning college grads are all over the news these days, however, a degree DOES pay off in terms of employment. The unempoloyment rate for college grads is far lower than those without degrees, sparking this article in the Atlantic, “What’s More Expensive Than College? Not Going to College.” You may have racked up some debt paying for your education, but education is one of the wisest investments you’ve made in your life.
2. Some of your worst days lie ahead. Make sure you’re protected.
You may be young and healthy now, but you may not always be so. Health insurance costs may seem among the easiest to cut when you survey your budget – but think twice. Accidents happen. Even if it’s for a short stretch, make sure you are covered – medical bills are the leading cause of . You’ve got several options, whether you need temporary care, are going to stay on your parent’s plan, are about to enroll in an employer’s plan or need permanent health insurance.
The same goes for your home and your car, other bigger expenses in any budget. Renters insurance may seem unnecessary, as might full auto coverage. To keep an unforeseen event from derailing your finances, look into these types of insurance and see if your risk warrants coverage. Make sure you know all the facts, as well as your exposure to risks, before choosing to go without renters or auto coverage.
3. Don’t make your debt/financial situation worse.
Even if you have looming student debt, or want to keep up with the Joneses, resist spending beyond your means. You never know what lies ahead or what tough times will befall you. That doesn’t mean they will, but you never know when you may need to fall back on an emergency fund. Put away a bit of what you earn each check, and don’t fall prey to credit card debt.
Even if your first paychecks are small, make saving a top priority – now is the time to start good financial habits, without developing ones that will add on to any school debt you’ve acquired. Take care when using credit cards and resist the urge to keep up with the Joneses. There are always going to be people with more to spend than you, but a realistic view of what you’re bringing and what you have to spend will serve you well.
Follow the basic principle: spend less than you earn. Writing down where all your money goes and tracking it is the first step in finding ways to make your paychecks stretch as far as possible. Check out tools like mint.com or SmarterBank to get some help managing your finances, budgets, and debts. There’s even a mint app for when you are on-the-go! You’ll be a finance pro in no time, and thankful for your good habits in the future.
4. Get the advice of someone smarter than you are.
If you need help budgeting or are wondering if you need better insurance coverage or should start investing or are paying the right amount for any of your expenses – ask! Whether you turn to a book on finance, a mentor, a parent, an agent or an advisor, don’t be afraid to seek the guidance you need. It will pay off, literally.
5. Don’t try to take the easy way out.
Cutting corners with your finances may open you to all sorts of risks. In your first years of working, seek to build your finances, and if you are not already, seek financial independence from your parents.
To the class of 2012, best of luck!
