New Grad’s Guide to Personal Finance

New Grad's Guide to PERSONAL FINANCE Graduating from college can be an exciting and stressful time. Suddenly you need to find a job, repay loans and make solid financial decisions. Fortu- nately, you don't need to be unprepared. To keep your spending under control, start with a budget. If you have no idea how to create a budget, here's a look at how you may want to allocate your funds. Remember that these numbers are different for everyone, and you'll want to examine your own monthly spending to see what areas you should focus on. BUDGETING BASICS 40% 20% Debt repayment and savings Housing and utilities 15% Food 10% Clothing and entertainment 5% Car insurance and personal expenses 10% Transportation, including car loan Being financially responsible consists of more than simply organizing your spending habits. It means that you have a strong hold on your financial accounts. Here's what you Most people have three different financial accounts: Your checking account, a savings account and credit cards. 100 $ need to know: Crodit Card Checking Account Credit cards Savings Account Often employers will direct deposit your paycheck in this account. Your checking account is for short term expenses that are paid daily to monthly. This account will pay things like your car or student loans, your rent, etc. Credit cards are optional but they do help you build a good credit history. Credit cards are for expenses ke food, gas, etc. If you use a credit card, use one that offers rewards or features you will be able to take advantage of. A savings account is for longer term expenses. It also serves as a holding area until you decide where to put it, such as in retirement, saving for a vacation, or an emergency fund. Savings accounts acquire a small of interest. After graduation, it's important to set long-term financial goals for yourself. How you handle money over the next few years is vital. Here are some suggestions that can be beneficial in the long-run. LONG-TERM BUDGET GOALS c00 000 000 000 Find a career path Build an emergency fund Plan to repay your debt Start a retirement account You want more than a job that pays bills. By the time you are 30, you want to Be prepared for the unexpected. Save money for at least 3 months Debt doesn't just go away. Make a plan to repay loans and credit cards by the time you are 30. It's good to plan for long- term goals early. Putting even a small amount away each month adds up. have a career. worth of expenses. As graduates prepare to enter the workforce, finding a job in the right city is crucial. Here are the top 10 cities Kiplinger recommends for new grads: BEST CITIES FOR COLLEGE GRADS Key: $ Median income Nat. average: $30,402 A Median monthly rent Nat. average: $817 Unemployment rate Nat. average: 9.2% Omaha, NE Seattle, WA Boston, MA $ $27,075 $ $33,372 New York, N.Y. $36,174 $711 O $942 $ $34,039 O $1,112 5.1% 9.2% $1,072 7.1% O 8.4% Philadelphia, PA $30,974 $895 San Francisco, CA 8.5% $ $38,448 Colorado Springs, CO $1,259 10.0% $ $26,977 Washington, DC Baltimore, MD $802 Charlotte, N.C $40,952 $32.994 10.1% $972 $28,386 $1,226 9.5% 7.4% O $774 10.4% There are many websites to help you track your spending and investments. Some even offer advice and help you plan. Here are a few: BEST TOOLS FOR PERSONAL FINANCE PayPal Credit O Karma mint SIMPLIF I portfoliomonkey a Allows you to budget as well as connect and view Pay for many things online securely. (Web, iPhone, Android, Blackberry) Offers a free score Helps you reach financial goals like saving for retirement or repaying debt. Analyzes your expected returns, losses; also lets you reallocate your portfolio. and advice on how to improve it. all of your financial accounts. (Web, Android, iPhone) IEO EEBA TurboTax Snantax iWallet tracks income and expenses. (iPhone) IExpenseonline gives guidance on improving habits. (iPhone, web) Let's you calculate and file taxes electronically. (Android, iPhone) Easy Envelope Budget Aid Debt Dog calculates the produces budgeting reports. (Android) true cost of purchases on credit. (Phone) Ask Men | Money Crashers | Money Girl | SOURCES: Kiplinger | Cleveland | Bargaineering | Wall Street || Online College.org Information provided by: http://www.onlinecollege.org Apps Sites