It's graduation season and we know there are a lot of folks fresh out of college looking for their first job. But there are things you should be thinking about before you even get that first paycheck.
I talked to personal finance expert (and certified financial planner) Bobbi Rebell about how new grads can become a financial grownup.
BOBBI: Even though you may not be starting your new jobs right away, it's really important to have a strong financial foundation. Get your ground game in order before you launch.
BRANDI: I think a lot of us had the attitude getting out of school that you had the perfect job in mind. You knew exactly what you wanted to do and you weren't going to settle for anything else.
BOBBI: You may bet your dream job in terms of your income requirements. That's great! But it might be a lot more work than it is when you were maybe an intern. On the other hand, you may have a job that is saving the world and doing all these amazing things for society, but it can't pay your bills. That's something you have to really be honest with yourself about -- whether that is long-term sustainable.
BRANDI: I don't think this was ever emphasized enough to me when I finished school. You've gotta start saving, really, as soon as you can.
BOBBI: Absolutely. People get so caught up sometimes in paying down their debt almost maniacally. It's good to pay down your debt and I don't want to do anything to discourage that. But the truth is compound interest is a really good thing too. It's important to be investing as early as possible and especially in the right vehicles. If you have a corporate job, you need to make sure you are on the bandwagon with whatever free money they have. I'm talking about 401Ks and maybe other things that your company offers you. Do your homework.
BRANDI: You talked about this as a priority: paying down debt. How do you do it in a kind of systematic way?
BOBBI: You have to look at how your mind works. That may be as simple as writing everything down that you owe and prioritizing it. There's different methods. Sometimes people like to pay down the highest interest card first. Sometimes people like to pay the amount that's the lowest balance so you feel a sense of accomplishment. But there are also different kinds of debt and it's important to understand where that debt fits into the bigger picture.
For more information about how to become a financial grownup, visit Bobbi's website.