Graduation season is here for high school and college students. While it’s an exciting time, it also can be stressful for many teens and young adults, as they have to take out student loans or start repaying them.
The average student might find it difficult to grasp the intricacies of paying for college. And that’s on top of managing a budget and choosing the right credit card.
Unfortunately, not everyone can afford a money expert to manage their finances. But some financial geniuses have dished out advice publicly over the years. Here are some of their top tips that can help new graduates navigate the world.
1. Know that price and value aren’t the same
Warren Buffett is one of the richest men in the world, so he knows a thing or two about how to handle money. One of his tips is to live frugally, which he learned from another wealthy investor.
“Long ago, Ben Graham taught me that ‘price is what you pay; value is what you get,'” Buffett wrote in a 2008 letter to shareholders. “Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”
But it’s not just about paying a low price. It’s also about getting something of value. “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price,” he wrote in a 1989 letter to shareholders.
2. Make a budget and stick to it
Financial expert Dave Ramsey has popularized many financial concepts, including the debt snowball method. In fact, we’ve published numerous success stories of people who got out of hundreds of thousands of dollars’ worth of debt thanks to that strategy.
But Ramsey offers other good advice as well.
“I tell young people who call our radio show that you’re already used to living like a broke college kid, so keep living like one until you start making grown-up money,” he told CNBC. “That way you can clean up any debt you might have, build up your emergency fund, and start saving for the things you want and need down the road like a better car and a down payment on a house.”
3. Understand how to negotiate
Sheryl Sandberg has long been a financial advocate for women. She even wrote the popular book “Lean In: Women, Work, and the Will to Lead,” in which she shared her insights about becoming a successful female leader.
One of the biggest struggles women face is the wage gap, something Sandberg has spoken about.
“Negotiate communally,” she said at a Stanford forum. “If you are negotiating for a raise and you are a man, you can walk in and say, ‘I deserve this,'” she said. “That will not backfire on you. We know the data says it will backfire on a woman.”
“So I think along with saying, ‘I deserve this,’ [women should explain] that, you know, ‘This is important for [my] performance’ and ‘This will make [me] more effective as a team member,'” she added.
While this tip was directed toward women, it’s a good thing for all new graduates to keep in mind as they head into their first jobs out of college.
4. Limit your loans
Many people have to take out student loans to afford college, but financial expert Suze Orman advises students to keep loans to a minimum.
Her rule of thumb? “Don’t take out more than your first year’s salary in loans,” she told CNBC. So, if you’re going to make $40,000 a year, don’t borrow more than $40,000.
Unfortunately, attending a more expensive school doesn’t guarantee you’ll make more money. Keep costs to a minimum and attend a college you can comfortably afford.
5. Never stop learning
Billionaire Mark Cuban has become an expert on not only financial success but also happiness. That’s why he told CNBC he’d give the following advice to college graduates: “Never stop learning. Never stop grinding. Never stop loving every single minute of your life.”
Even after you earn your diploma, it’s important to continue learning new skills to diversify your expertise and stay relevant, according to Cuban. Then, use your talent and hustle to become successful. And perhaps most importantly, enjoy the process. Celebrate the wins and roll with the failures as much as possible.
It’s easy to feel overwhelmed when you graduate from high school or college. But it’s important to take time to understand your money situation. Use the above tips and create a plan that’s practical for you. From there, you can use tools like our calculators and budgeting plans.
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