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10 Financial Tips for a Young Graduate

10 Financial Tips for a Young Graduate
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Friday, 07 June 2019 01:37 PM Current | Bio | Archive

I thought I would share parts of a letter I wrote to my younger cousin who just graduated from college with a degree in engineering.

I’ll refer to him as “W” to keep him anonymous. He starts his new job at Lockheed Martin next month, and we’re all really excited for him.

W,

Congratulations on finishing your degree and on getting the Lockheed job. That first job and getting your career started on the right foot is really important. And you’re getting yours starting right!

At any rate, let me give you a few parting words of advice.

  1. With your first paycheck, have fun. Treat yourself to something frivolous. Blow it. Enjoy it. And then, after that, it’s time to get serious and be an adult. But blowing the first paycheck on something stupid is a nice way to reward yourself for finishing your degree.
  2. I don’t know what your living plans are, but living with your parents for six more months will allow you to pad your savings. You should move out pretty quickly, as that’s important to being a real adult. But another 6-12 months at home won’t kill you, and it will allow you to save up enough cash to buy a car or even make a down payment on a modest house. Just make sure you actually save it and don’t just blow it all.
  3. Open two checking accounts. One will be the account your paycheck goes to and the account you use for your regular expenses. The other should be for saving. You can tell Lockheed to split your check across two accounts. They’ll do that. You can put 90% in the main account and 10% in the secondary account, or whatever makes sense. But keeping that cash separate makes it harder to spend.
  4. Put AT LEAST enough of your paycheck into your 401(k) in order to get the free employer matching. It’s literally FREE money. Ideally, you should put a lot more. You can put up to $19,000 into a 401(k) annually at your age. But at a bare minimum, put whatever you need to put to get the employer matching. It’s just stupid not to.
  5. Don’t get a credit card. Use a debit card or pay cash.
  6. Avoid debt on anything other than a house or car, and even on the car try to keep it minimal. Debt has ruined far more lives than drugs or alcohol ever have.
  7. Learn how to cook. Or, if that is a lost cause, find a girlfriend who likes to cook and treat her right and never let her go. Going out to eat all the time will bankrupt you, and it’s terrible for your health. This is a lesson best learned while you’re still young.
  8. Try to exercise at least a couple days per week. You’ll regret it when you’re 30 (and more when you’re 40) if you don’t.
  9. If your boss yells at you, don’t be a typical thin-skinned Millennial and get offended. Keep the stiff upper lip and use it as an opportunity to learn something and improve your marketability as an employee. I learned FAR more from the mean bosses than the easy-going ones. The boss who is your buddy isn’t going to get you anywhere. It’s the mean bosses that toughen you up who help you advance.
  10. Try to attach yourself to a manager that is really going somewhere in the company. If you do good work for them, they’ll take you with them. If you attach yourself to a manager who’s not really going anywhere, neither will you.

And that’s it. This is the only real wisdom I’ve managed to acquire in the 20 years since I graduated.

Good luck in the new job, and let’s get the families together for some grilling this summer!

Take care,

Charles

Charles Lewis Sizemore, CFA, is chief investment officer of the investment firm Sizemore Capital Management and the author of the Sizemore Insights blog.

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I thought I would share parts of a letter I wrote to my younger cousin who just graduated from college with a degree in engineering.
financial, tips, young, graduate
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2019-37-07
Friday, 07 June 2019 01:37 PM
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