College graduates who are entering the workforce or simply looking for an employment opportunity may not have implemented the best financial practices that they possibly can, as many feel that investing for retirement, keeping themselves in the decent financial position, or simply focusing on erasing debts, like college loans, are not necessarily a priority early in life and, for some, acquiring debt is seen as a safer practice earlier rather than later, so many men and women begin to rely on credit cards and establish poor financial habits as a result.
Yet, there are various aspects of the lives of young employees that should be looked at in terms of financial planning earlier in life, as investing, bad credit repair or simply building a better credit history, and debt repayment can make a college graduate’s financial life much easier if they deal with certain aspects of it early. While retirement investing, debt repayment, and budgeting are not necessarily fun or high on a young employee’s agenda once they have a job that may pay somewhat well, they all are areas where graduates must focus if they are to avoid problems that will arise later in life.
A recent article on MSNBC.com states that factors like investing, contributing to a retirement account, and focusing on debt repayment are a few of the aspects that a young individual needs to look at in their life and begin focusing on if they are to find more affordability, security, and even stability later in life. As an example, some graduates may wait before they begin to contribute to a retirement account or some have even begun investing in stocks, which can both be problematic in the life of a young individual.
Young workers who may feel that losses from investing in stocks can be made up could find that they put themselves a step behind when planning for retirement, as contributing funds to a 401(k), as an example, rather than investing in stocks, could be a safer bet for some, even though there are options that have allowed graduates and young employees to do both and minimize the risk. Obviously, focusing money towards a retirement account like a 401(k) or a Roth IRA is something that some advisers feel should not be done early by young investors, as stocks could yield a higher rate of return and, again, any losses or setbacks could be recouped later in life, but this is an area in which many young individuals need to take caution as opportunities in the stock market have provided some with a great deal of success, while others have lost almost all they have.
However, one area that is probably more problematic to recent graduates or young employees is the area of debt, and this is something that consumers must focus on early in life as a high amount of debt can snowball and become problematic for years down the road. Understandably, factors like investing or planning for retirement can be highly individualistic as some recent graduates may be in a better position to take advantage of investing in stocks while others have erred on the side of caution and simply begun saving and investing in retirement account.
However, when it comes to debt, many consumers are on the same ground and often spend beyond their means to repay or simply meet minimum payments on their credit card debt, which will cause the overall costs to be much higher and, again, could lead to financial distress later in life. For this reason, many counselors often suggest that recent graduates and those who are not far into their career look at these areas as budgeting and saving to make purchases can be more beneficial down the road then overuse of a credit card, as even affordable credit card purchases and repayment methods can help a consumer build a more positive credit history and score.
Yet, when it comes to finances, there are numerous areas in the lives of young individuals that need attention, but when it comes to saving and investing, as well as, spending and repayment, these are usually the places where the most can be gained or lost. While, these aspects of a consumer’s financial life will ultimately depend upon the individual and their particular situation, taking caution in investing and implementing smart financial practices in terms of debt, repayment, and building one’s credit are a few areas that some young consumers believe are not vital for their attention at the present time, but may offer more benefits if, indeed, young graduates and employees will make their personal finances a priority early in life.