A Letter to the College Graduating Class of 2020
Dear College Graduate,
My, what a year it has been - a year like no other. At OLIO, we have been thinking about you and want you to begin your career with a bright future and promising opportunities. A rapidly spreading, global virus seemingly has other plans for you. We say seemingly because you can enter the work world with a vision of how you want things to be and the youthful enthusiasm to make changes.
We are particularly interested in your financial future. The current volatility of the stock market and record-setting unemployment give you two strikes before you even get up to bat. But like the famed baseball legend, Babe Ruth, said, “Don’t let the fear of striking out stand in your way.” Currently, we have no proven playbook for going forward, which gives you the opportunity to be creative, mindful, and focused in forging your path. If you are just starting with the basics in your financial life, we offer five practices to help you establish a strong financial footing as you begin this next phase of your career.
Know where your money is going. Track and analyze where you are spending money and if every purchase is necessary.
Develop a realistic budget and stick to it. You should never spend more than you earn, so decide where your money will go and how much needs to be attributed to each item.
Pay off debt. Building a good credit history is important for many reasons, so make sure you pay your bills on time. For credit card debt, strive to pay your bill in full each month.
Start contributing to an emergency fund. Even if you can only contribute a small amount each month, minimal amounts build up over time. Now is one of those times, when if you have an emergency fund, you are positioned better than those who don’t.
Review each item above quarterly. Having a clear picture of where you stand with your finances helps you plan for the unexpected and allows you to celebrate financial victories along the way.
We cannot extend our best wishes for strong financial health, without addressing those of you graduating with student loan debt. Make sure you research and understand the payment terms of your loan(s). Also, keep every piece of documentation loan providers send and detailed notes of conversations you have with them should you ever need to prove something if you’re part of a debt forgiveness program.
Remember, achieving financial freedom is a long game. The earlier you start, the greater the rewards. Let compound interest build your future. If your employer offers any matching funds in a retirement plan take advantage of this free money. Seek direction from a CERTIFIED FINANCIAL PLANNER™ professional in creating a comprehensive financial plan and then follow through with the execution.
We believe in you and know great things are ahead. Don’t give up. When obstacles present themselves, find a way to go through or around them. Resilience develops when your plan does not go as anticipated and a different approach must be taken. Many times, the new approach provides a better outcome than your original plan. Failure is not the end, it’s the beginning of finding a different solution. Embrace it!
So, to the college graduating class of 2020, we say, “Save more and plan wisely!” We applaud you!