Welcome to InvestorPlace’s special feature package on financial advice for the graduating class of 2020! It’s been a tough year on all of us due to the novel coronavirus, but none so much as it’s affected students and teachers. In light of current economic turmoil and historical social events unfolding in front of our eyes, its easy for finances to take a back seat. But yet, how new graduates inform their understanding of money plays a critical role in their futures as leaders of the world.
New graduates are entering a market radically reshaped by Covid-19. Here's how to maximize your money when you're fresh out of school.
"If you start saving nine years earlier, you will have twice as much money; that is the beauty of compounding."
'People should be lauded for paying down student loans. However, making that the only financial priority is misguided.'
'Most graduates will probably be more risk averse regarding their savings and budgeting due to Covid-19.'
'Borrowers should not, however, confuse minimizing their monthly payments with saving money. Minimizing payments is not the same as minimizing interest.'
'It is important to look at the benefits package that an employer is offering when considering job offers. Make sure that you have some health care options, disability insurance coverage and retirement savings plans.'
'Likely, unscrupulous people will advise you to invest most of your money in stocks because you are young and retirement is decades away. Your answer should be that being young does not mean being stupid; no less than 35% of your money should be invested in (government) bonds.'
'Building savings is made by the day-to-day decisions we make to spend less, save even if its $2 a day at first, but be consistent and set this money aside. An emergency fund takes time to build. Repaying student loans will also be the habitual paying debt down each month, perhaps throwing a bit more towards the debt, until it is paid.'
'It is quite likely that even after the pandemic passes, employees will resist commute and appreciate the flexibility of working from home at least one day a week. Employers will see this as a reasonable and productive alternative to expensive bonuses and other benefits.'
'If you are having trouble making payments on your students loans because you are having a hard time finding a job or unemployment, the best thing you can do is contact your lender and see if you can delay payments.'
'Specifically, with regard to savings, it is important for new graduates to develop an emergency fund with at least 6-8 months of expenses. The economic downturn due to the coronavirus has highlighted the financial fragility of many households.'