|The extent of my financial knowledge before this event.|
Allocate your income. When it comes to determining how much to spend and how much to save, it seems like everyone has a different rule: put 20% of every paycheck in the bank, put 30% of your income towards your rent... it's hard to keep up with all of them. Stuart broke it down pretty simply, and gave a few hard-and-fast rules that everyone could follow, regardless of income. He sketched out a rough breakdown of your income: 50% goes to necessities (rent, bills, food, etc.), 25% goes to priorities (paying off debt, saving up for big purchases, grad school nest eggs), and 25% goes to wants (things you could in theory go without). These percentages could change over time - for example, cut back on the "wants" spending if you're going through a tight financial period - but lay the foundation for keeping yourself in check when it comes to your income.
Start saving for retirement immediately. I've always heard my parents and other real adults talk about saving for retirement, and throw around seemingly random combinations of letters and numbers in reference to different ways of doing it, but I've never really paid attention to the conversation. Now that I'm on the cusp of entering the working world, I've realized how important it is to start investing in your future. Stuart encouraged all of the workshop's attendees to start putting up to 20% of our monthly income into a retirement account - whether it's a 401(k), a 403(b), or an IRA. (Google all of these to find out the differences and which one is right for you!) This is such an important action, particularly for our generation; now that people are living longer and retiring younger, and the future of Social Security is questionable with the aging Baby Boomer generation, it's more important than ever to ensure that you have money to live on in the last stage of your life.
|A popular reference during the workshop - and a real fear of mine on most days.|
Get insurance. Being of the "Young Invincible" breed that insurance companies and health policy professionals detest, insurance has always seemed like an afterthought rather than a priority. But Stuart put it this way: insurance is meant to protect you from devastating loss. That protection is worth more than spending money on frivolous purchases, or even saving up for emergencies (which you may not be able to cover with your savings alone). He encouraged everyone to obtain health insurance, renter's insurance, car insurance (if applicable), and liability insurance. It may seem like a drain on your income, but it will be worth it in a worst-case scenario.
As you might be able to tell, Talking Money, Part 2 covered a lot of ground, and I've just scratched the surface here.There's a lot to know about personal finance after college, but it doesn't have to be overwhelming. A 2015 Tufts grad came with Stuart on Wednesday, and she emphasized that small steps, one at a time, will get you to a place of financial well-being. To all the soon-to-be graduates like myself: make sure that you are educated on financial literacy before you enter a world powered by money.
Until next time,
Class of 2017
Class of 2017