5 FINANCIAL MISTAKES NEW GRADUATES MUST AVOID

financial mistakes new graduates must avoid

College graduates face a lot of challenges soon after graduating; challenges that tend to influence how they handle their finances. Some of the challenges include student loan debt, scarce jobs, and jobs and complicated financial options available to them. Some of the challenges drive new graduates to commit costly financial mistakes that haunt them for the better part of their lives. Below are just 5 financial mistakes new graduates must avoid at all costs.

  1. Debt accumulation – This is one of the common financial mistakes that new graduates must avoid to be financially stable in their working life. Most new graduates accumulate debt soon after securing employment through heavy borrowing with the aim of buying all that they need at a go. Most end up buying new furniture, new car and renting apartments, things they can easily do without at the start. New graduates need to avoid getting into debt soon after graduating in order to build their credit history steadily.
  2. Poor money management – Majority of new graduates fail to realize that college lifestyle is over and carry over the same into the “outside” world, with dire consequences. New graduates need to learn how to accomplish minor tasks on their own, which goes along way in eliminating unnecessary expenses.
  3. Failing to save and invest – This is one of the costly 5 financial mistakes new graduates must avoid to be financially stable. Majority of new graduates do harbor the belief that they do not have extra money to save or invest. Most also do opt to wait for the most “appropriate” time to start saving, not realizing that such a time may never come. New graduates need to understand that saving and investing is a culture that they must develop and the best time to start doing so is soon after graduating and securing employment.
  4. Negotiating for low salary – New graduates tend to think that they are not entitled to good pay since they have just entered the job market. They therefore negotiate for low salary that does not settle their basic financial obligations. In addition to negotiating for good salary, new graduates need to negotiate for other benefits including healthcare, and retirement account among other things.
  5. Failure to address paperwork – This is one area where new graduates perform very poorly. Most fail to complete paperwork relating to tax documents, credit card statements and health insurance forms. They leave these to pile up, which causes delays and complications when relevant authorities try to ensure that they have their details. New graduates need to make use of modern technology that make it very easy to process and submit such vital documents.

These are certainly just 5 financial mistakes new graduates must avoid for a financially stable working life and start of a happy path to savings, investments and comfortable life in retirement.

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