Education Expense Planning

A Strong Financial Foundation for the Post-Graduate Years

As graduation is often a fresh start into a new era of your life, it is also a critical time to establish a strong financial foundation for your future. The financial decisions you make during this time can have a huge impact on your life for many years to come.

Financial Literacy

A recent survey showed that 82% of parents believe schools should teach financial literacy and money management. Have you seen the meme where a student asks their school how to prepare their taxes and the school tells them to zip their lips and get back to square dancing? That seems to be a common experience for many who didn’t feel school prepared them for real world financial management. While a balance of exposure to a multitude of topics is valuable during the school years, financial exposure isn’t high enough, yet. Parents and children must accept the responsibility to teach and learn money management skills beyond school curriculum. Financial literacy can lead to financial independence and informed decision making.

Budget & Spending Plan

  • Do you have some of the basics in place, such as a bank account and/or credit card? Having a place to save and a way to build credit will be valuable in your budget and spending plan, as well as with future goals.
  • Will you need to live at home or with a roommate for a period of time? If you’re not prepared to live alone from the start, this could be a way to save money for a future living goal. Remember, some living situations may require credit, a down payment, insurance and other needs beyond the rent or mortgage payment.
  • Setting a budget and knowing your income go hand in hand. You can base your current budget on your current income, and also make a budget that speaks more toward your goals and work toward a career that can financially support those goals. At every level of income, strive to spend less than you make so there is room for saving and investing for the future.


Debt Management Plan

There are basic needs you may require upon graduation that could incur debt, such as a car, down payment or large appliances, but a big component for many graduates is student loan debt. Debt repayment should be included in your budget. Some professionals choose to live lean during their early years, pay off debt and create a large nest egg for the future. This is a lifestyle to consider if you’re interested in making a big impact early on in your earning years. This also helps avoid lifestyle creep, a term used for those spending more as they earn more, and thus not actually making as much financial growth as their salary increase would suggest.

Ask yourself what type of lifestyle you want, now and in the future and develop a plan as early as possible to reach that lifestyle. We help graduates starting out and would be glad to help you on your path.

Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this content, will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for you or your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter (article) serves as the receipt of, or as a substitute for, personalized investment advice from Allos Investment Advisors®, LLC.

The content of this letter does not constitute a tax or legal opinion. Always consult with a competent professional service provider for advice on tax or legal matters specific to your situation. To the extent that a reader has any questions regarding the applicability of any specific issue discussed in this content, he/she is encouraged to consult with the professional advisor of his/her choosing.

Published for the blog on April 9, 2024 by Allos Investment Advisors®, LLC.


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