When it comes to pointing at a certain group and accusing them of financial illiteracy, most experts would agree recent college graduates and young adults in general are the guiltiest party. Some are unfamiliar with credit, investing, and even behavior skills for the workforce. In countless ceremonies, graduates receive advice from peers, professors, leaders in the community and even celebrities, but most overlook the need for basic financial health advice.
College graduates are often advised to go out into the world, work hard, do good works and be successful. But in order to do that, many first need to be entertained by a few good practical tips on personal finance. Many are completely unprepared for financial life post student life. They are unprepared to make loan payments, have no plans to invest, and have not thought about how they should protect either their assets or their own credit.
If you have a recent college graduate in your life, make sure they get the following advise in addition to traditional commencement speeches to help them avoid bankruptcy:
- Understand Credit: Regardless of whether or not you think it’s good or bad, existent or non-existent, request a free copy of your credit report. Know what’s on it and how you look from the credit bureau perspective. Many recent graduates are surprised to find that they have a credit history.
- Handle Your Student Loans: Many recent graduates will be entering the work force with substantial debt (tens of thousands in student loans). Some graduates might be tempted to simply ignore the obligation. It’s important to recognize the consequences of this type of non-action. Not paying or paying late on your student loans will negatively affect your credit score. It could increase your interest rates and result in fees and penalties. In addition, student loans aren’t generally included in a bankruptcy filing and it’s best that students considering their financial options are aware of this from the start.
- Learn a Bit About Investing: Build up a cash reserve (for a recent graduate entering the work force it’s suggested to have enough saved up to cover 6 months of expenses as job changes will be common). In addition to building up an emergency rainy day fund, also look into creating an investment plan.
- Deal Appropriately with Your Employers: Know what’s expected in the workplace. Most employers aren’t going to accept the same type of relationship you offered to your professors in college. Know how to behave professionally particularly when it comes to the application process. Give special attention to your knowledge of appropriate workplace written communications. Your resume is still your first chance to make an impression on a prospective employee in most situations.
If you are a recent graduate, we do hope you enjoyed your commencement speeches. But if you feel in need of advice on financial health or solutions for financial crisis contact an experienced bankruptcy expert at Westgate Law; we can guide you to the right solution.