PHOENIX — There is a newly minted class of college graduates entering the workforce and for some, it's the first opportunity to put money in retirement accounts or invest earnings.
Financial experts have five tips to help set you up for financial stability in the future:
1. Don't default on student loans
If you have trouble making your standard federal loan payment, consider switching to an income-based payment, which might lower your monthly bill.
2. Prioritize budgeting
As students, many still leave it up to their parents to handle finances but taking control of your budget is the best way to ensure more money is coming in than going out.
3. Don't be short-sighted
New graduates often make the mistake of assuming they have plenty of time before thinking about retirement.
Valley financial advisor Stewart Willis says if you start now and earmark $300 a month for an IRA, you won't have to think about it later and you'll be sitting pretty.
"If you make an annual contribution of $3,600 into your IRA starting at age 22, with an annual average return of 8%, by 62 you'll have a million dollars. The catch is, waiting just 10 years it'll cost you $8,200 more a month to get to that same million dollars," said Willis.
4. Use the 80-20 rule
When you get paid, spend 80% on expenses and split the remaining 20% between saving and spending.
5. Any time you get a raise, add that to your savings
The goal is to have $1,000 in the bank at all times as a safety net.
