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Putting your money to good use can go a long way towards your financial health, and there are countless ways to do this. One way to do this is to start investing. Making an investment can mean several different things; for instance, you could make a loan to a fund, buy a stock using an investment app, or simply put money away for your future.
As a new graduate from college, getting on track with your investments can be tough. Most young adults neglect their investments for a simple reason: student loans. Over 70% of graduates have student loan debt after college, and the national average exceeds $30,000. These loans take years to pay off, and it is normally the first time these young employees encounter a sizeable piece of debt.
There are a few tricks that can help a debt-ridden ex-college student get on track for a long term financial plan. Student loan refinancing, consolidation, and student loan company benefits are just a few ways to manage student loans. With this type of aid, it becomes even more important for graduates to start making useful investments early on before it is too late.
More and more new employees and graduates are neglecting their retirement funds. With student loan debt, there is not much incentive to put money away for something so far off. This is a pretty big mistake. Several statistics reveal that considerably less money is available at advanced ages with each year without a retirement fund. This is one of the most important investments to make because it is essentially investing in yourself. The only way to retire early is to start investing in retirement early.
This is another case where you happen to be investing in yourself. If you read any sort of advice piece on a personal budget, then you will most likely read about the importance of emergency funds. These are important because they are essential when you find yourself injured or in any medical situation. Just like the retirement fund, young people woefully neglect devoting money to this budget requirement. Why save $100 a month instead of paying student loans? If you can manage, then that monthly $100 keeps you from getting blindsided by an emergency.
While this may not be in a graduates to-do list yet, it is quite possibly one of the most important things to plan for. Your future children are going to cost a ton of money. While you may not even have a girlfriend yet, any future spouse is going to be pleasantly surprised by saved up funds for the onslaught of children expenses. If this has not convinced you, then think about how much school alone will cost. Saving for these future expenses is crucial.
We have been talking about saving money to eventually spend money; for instance, investing in your child and your health means you are setting money aside until it is needed later on. Now it is time to start investing money to make money. This is another daunting task for a young graduate, but it is definitely a potential beneficial investment. Contributing to an investment fund is a great way to make money off the stock market, but these investments carry a degree of risk. If you still want to invest without as much risk, then invest in a mutual fund in which multiple people share the risk and profits. This is the best way to get your money working for you.
Author: Jeff Gitlen