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Ready for the World? - This Year's College Graduates

Ready for the World?  - This Year’s College Graduates

 

          After several years of horrid job markets for new college graduates, things are starting to look better in 2011.  The National Association of Colleges and Employers reports that employers expect to hire 19% more recent college graduates this year than last.  Hurrah!

          Despite this improving news there is no guarantee of smooth sailing for any graduate.  Recent grads also face many financial hurdles beside the obvious one of landing a job.  Graduates now come out of college with an average of $24,000 in student debt.  A recent study for American Express found that 57% of twenty-somethings are still financially dependent on Mom and Dad.

          So for the college graduates and their parents, in between job interviews find an opportunity for -

          First Paycheck Shock– That initial salary may seem like a lot of money, but rent for a solo apartment as opposed to a house with roommates or the dorm and requirements like taxes, social security add up fast.  Many new hires are shocked to find that a monthly salary is far different from your annual salary divided by 12.

          Signing Up for Online Banking – Automatic deposits of salary and automatic withdrawals for utilities, savings, car payments, etc. can go a long ways to avoiding those dreaded overdrafts from spending the paycheck on fun stuff.

          Look at Long Term Interest – Aim for acquiring more funds through interest earned over the long term of savings accounts begun early in your career and avoid long term interest paid out for student loans. 

          Emergency Savings Are Your Friend - Help your graduate to begin weaving a safety net. New grads don't realize how quickly a crisis can upend their fragile budgets. The ultimate goal is three - six months of expenses, but put that in dollar terms. Devise a plan to get there, open a savings account and set up automatic transfers from checking.

          Insured till 26 - In a perfect world, everyone lands a job with health insurance right away. But if that's not the case, thanks to last year's health care laws, your child can stay on your employer's plan until age 26, as long as he/she can't get insurance through a job. And if you already have family coverage, adding one more may not cost a dime.

          Talk up Retirement - College graduates are visualizing new cars, homes, vacations, etc. and not where they plan to retirement. Instead of retirement, help graduates fantasize about being rich.. Note that stashing a mere $99 in a 401(k) biweekly would make him a millionaire in 40 years - assuming a 50% match and an 8% average annual return.

          Congratulations to all Graduates and their parents!

 

 

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