May is truly a month for celebration – it’s graduation season and the Class of 2016 is ready to face the world with diplomas (and student loans) in hand.
However, May isn’t just about caps, gowns, and tassels; it’s also a month to celebrate one of the most important people in many of our lives: our moms. That’s why we can think of no better way to celebrate Mother’s Day and the newly graduated Class of 2016 than going to directly to the source.
9 tips for the Class of 2016 from money-savvy moms
We asked some of our favorite financial writers and experts, who also happen to be moms themselves, to impart some wisdom on today’s graduates.
1. Define your values and goals
“Take some time to explore your values. What matters to you and what makes your life worthwhile? Figure that out and you can start creating a financial plan that matches your values and goals.”
-Miranda Marquit of the Adulting.tv podcast
2. Don’t fear the credit card
“Don’t be afraid of credit cards. When used responsibly and wisely, they will help build your credit score now for when you need it later for buying a car or a home.”
-Shannon McLay of Financially Blonde
3. Keep living like a student
“Live cheap as long as you can. The longer you can live a frugal student lifestyle, the longer you’ll have to save up money and pay down your student loans. It’s hard to resist lifestyle inflation when you get your first job, but you’ll be better off if you set yourself up before you start moving up.”
-Holly Johnson of Club Thrifty
4. Start investing now
“Invest as early as you can. Whether index funds or carefully chosen individual stocks, invest in whatever motivates you to spend less than you earn and set aside money for your future. The sooner you get started, the sooner you can learn from any mistakes, become accustomed to stock market gyrations, and benefit from compound growth.”
-Julie Rains of Investing to Thrive
5. Get a cheap, reliable car
“You don’t need a new car. Seriously, even if your current car is on its last legs, you don’t need a brand new one. Used cars are just fine.”
“Go for a quality product – think Honda Accord or Toyota Camry. Take care of it. Ask your local mechanic what needs to be done and when. Oil changes are every 3,000-7,000 miles. Going too long between changes can damage your engine. Brakes need to be changed depending on how hard you are on them. Slowing down just a touch can add years of life to your brakes. Changing your brake pads on time can keep your rotors from warping, which is a far more costly repair than just the pads.”
-Mindy Jensen, Community Manager of BiggerPockets
6. Don’t let money control your life
“Don’t let money keep you stuck in life. The only way you can keep yourself from getting stuck is to live within your means. If you have debt, you don’t have extra spending money. Go out and provide value for people and make more money, and don’t over spend the money you do have. These are the two basic rules of money.”
“You be the one that controls money, don’t let it control you. Money is just a currency, a tool of exchange. If you can master it early, you will save yourself a lot of headaches in the years ahead.
-Tiffany Angeles of TiffanyAngeles.com
7. Refinance your student loans
“If you have multiple student loans, research refinancing. Refinancing can save money by lowering your interest rates.”
“To explore this option, make a list of all of your loans, note which ones are federal and private, current monthly payment and interest rate on each, and when you plan to pay them off. If you have federal loans, make sure you review the unique federal benefits and whether those benefit you… Every college graduate’s situation is unique, so make sure your loan repayment plan best fits you and your budget!”
-Emma Johnson of Wealthy Single Mommy
8. Keep an eye on your credit
“Keep your credit scores high by taking a look at your credit reports for free at AnnualCreditReport.com (the only place you can get them for free). [Also] learn about the five parts of a credit score and leverage your scores to save money (and deposit fees on utilities) on car loans and home loans in the upcoming years.”
“You created a plan to graduate from college and you worked that plan to bring graduation to fruition. You can do the exact same thing with personal finances. Make a plan and execute that plan. Welcome to adulthood.“
-Shay Olivarria of Bigger Than Your Block
9. Avoid lifestyle inflation
“Try to manage lifestyle inflation. It’s great to graduate and get that first job. You feel like a real adult who can BUY ALL THE THINGS!! However, if you manage your money well from the start you can have a lifetime of financial security.”
-Catherine Alford of CatherineAlford.com
The role of moms in financial literacy
As a new mother celebrating her first Mother’s Day, I can’t help but look at my own daughter and wonder what she will be like when she graduates from college in 20 years. Will she be ready to face the world ahead? Will she know how to manage her potential student loans or make financially sound decisions with her future in mind?
Whatever may come, I hope that I impart on her the importance of educating and empowering oneself on personal finance basics such as budgeting, credit, and savings.
On behalf of moms everywhere, a big congratulations to the Class of 2016! Now go forth in the world and make your moms proud.
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