FOR IMMEDIATE RELEASE
Louisville, KY—May 10, 2017—College graduations are just around the corner. “It’s never too soon for young people to start thinking about managing their finances—no matter how difficult it is to contemplate when they’ve just graduated,” said Carla Dearing, CEO of SUM180, an online financial wellness service designed to make financial planning simple and affordable.
“When you’re fresh out of college and worrying about how to land your first job, it’s not easy to think about savings for emergencies, the future and retirement. But believe it or not, there are some simple steps you can take right now that will jump start you on the path to financial security in your 30s. Invest some time and effort now and your future self will thank you, big time,” Carla continued.
Carla offers new grads the following five tips for securing their financial future:
- Know your number. Many of us have no idea what our expenses add up to every month. Discover your number. It will empower you to better align your spending to your priorities and zero in on ways to save. A simple spreadsheet can do the trick or, if you prefer, use an online money tracking service (like Mint or Quicken) to see all your financial accounts in one place and create your first budget. Do this and you will always know where you stand financially. Some budget apps give you complete access to your data through a website and your mobile device. They can also keep an eye on your money for you, with reminders to pay your bills or alerts when you’ve gone over budget.
- Build a savings cushion, including an emergency fund. This is your #1 savings priority. Here’s why: Unexpected expenses happen all the time, but if you have a cushion of savings, unexpected expenses won’t derail you. Instead of draining your long-term savings account or falling into debt, you can simply use your cushion to stay on track, then rebuild your cushion for next time.
How much should you set aside? Ideally, your cash reserves should cover six months’ worth of expenses. Then, after you have this six-month cushion, you should also set aside a separate emergency fund, enough to cover 24 months of expenses for longer-term situations, such as an extended illness. Saving a six-month cushion and 24-month emergency fund probably feels like an impossible goal. So, start by saving two months’ worth of expenses. You may be surprised by how doable this is—and you’ll feel a lot better, knowing you’re prepared to handle an unexpected expense. Eventually, as your income stabilizes, you can work your way up to saving the full amounts.
- Carry just a little credit card debt. This may seem counterintuitive, but at this point in your life, you do want to carry some debt, rather than none at all. Open a credit card with a modest credit limit and use it regularly, then—and this is key—be sure to make all your monthly credit card payments on time and in full. Doing this will help you build a solid credit history. You’ll need it to qualify for a loan someday, like when the time comes to buy a house.
- Refinance your student loans. Refinancing your loans is one of the best options to pay off your student loans faster and more cost-efficiently. When you refinance your student loans, you’ll have one consolidated loan with a single monthly payment and a lower interest rate, which is important as more of each payment goes toward paying down the balanced owed. Companies like SocialFinance (SoFi) have a strong refinancing offering. For more ideas, I also like Student Loan Hero’s The Ultimate Guide to Paying Off Student Loans Faster.
- If you decide to take this path, the first step is to find a reputable bank you’re comfortable working with and see what they can offer (ask friends and family for banks they do business with).
- It’s smart to compare interest rates to see if you can lower yours. Just remember, extending the term, while it lowers your payments, will result in paying more interest over time.
- Be sure to steer clear of companies charging high upfront fees to help you consolidate your student loans or that claim to be “approved” or “exclusive” servicers to “special programs.”
- Save 10% of your income every year. If you regularly save 10% of your income, no matter how much you earn, you will always have the confidence of knowing you are living within your means. Regularly saving 10% of your income will make other smart money moves possible, such saving a down payment for a house, setting aside a college fund for future kids or saving for your retirement. Think of saving 10% as the way you empower yourself to make ongoing investments in your financial health, year after year.
“If it still seems too hard, set up automatic bank transfers for the beginning of every month. By doing this, money you have earmarked to save is transferred from your checking to your savings account before you have a chance to spend it on something else,” Carla concluded.
SUM180 is an online financial wellness service designed to make planning and dealing with your money simple and affordable.
Specifically, SUM180 is differentiated in the following ways:
- SUM180 meets people where they are. SUM180 plans are personalized to help people wherever they are right now on their financial journey; whether they’re just beginning, starting over or well on their way.
- SUM180 plans are simple. They start with only the three (3) most important next steps, making them easier to accomplish, and gives clients a clear picture of where they are.
- SUM180 doesn’t assume clients want to become financial experts to meet their financial goals. SUM180 provides the tools they need, without overwhelming them with “education” and details they don’t need.
- SUM180 offers a community for users, unfiltered, which allows them to explore and share.
- SUM180 serves; never sells. Earning and keeping client trust is SUM180’s highest priority. SUM180 never makes commissions from any of its recommendations, ever.
Additional information about SUM180 may be found at https://sum180.com/.
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Robin Schoen Public Relations