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.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for SoFi.
2 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.50% APR (with Auto Pay) to 7.27% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 17, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 04/17/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on our student loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.49% effective March 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.50% – 7.27%1||Undergrad & Graduate|
|2.50% – 7.12%3||Undergrad & Graduate|
|2.53% – 8.79%4||Undergrad & Graduate|
|2.50% – 6.65%2||Undergrad & Graduate|
|2.55% – 7.12%5||Undergrad & Graduate|
|3.00% – 9.74%6||Undergrad & Graduate|