Finance Friday: Gifts for Graduates

I remember it well. June 13th, my graduation day from college. Having spent five years being taught how to think and then learning to think for yourself graduating from college is like your Dad taking the training wheels off your two speed overnight.

You were used to dime diving – ya know searching through the couch cushions in the student lounge to collect coins for your laundry. While you didn’t make much you made due. You always found enough money to go shopping, go dancing, and oh yea, go out eating.

But unfortunately, that “Real World” you kept hearing them refer to is rampant with due dates (past due dates), minimum payments and balances, fees and grace periods that expire after six months. Instead of buying flowers for the graduate in your life consider preparing them for the financial world they cannot hide from – no matter how many times they hit the proverbial snooze button.

I’ve stated before that I knew absolutely NOTHING about personal finance when I entered college. Not only did I graduate with a Roth IRA, a funded emergency fund and savings account, and a debt free week long stay in Panama, but was also able to purchase my first home at age 23. I attribute my enlightenment to one book: Rich Dad, Poor Dad by the Godfather of passive income, Robert Kiyosaki.

If you can get your graduate to do nothing else, I highly recommend you force this upon them – then let them make their own decision about how to proceed. The Godfather very simply talks about his upbringing and the influences that helped shaped his vision from his friends dad (Rich Dad) and his biological father (Poor Dad).  He introduced me to the concept of “passive income” and “making your money work for you”. I can say without a doubt, this book changed my life!!!!!

My other recommendation demonstrates a practical viewpoint of implementation. A semi-recent graduate himself, Ramit Sethi discusses in his book and blog by the same name, I Will Teach You To Be Rich, how young professionals can earn more, invest more, and do it all rather easily. He hates most financial advice and I hate some of his advice, but I give credit where credit is due: 90% of his material is absolutely valuable.

While he feeds off some stereotypes (especially in his Indian culture) he offers concrete advice as it relates to the psychology of individuals and why most people behave they way they do. The one thing that I took away from Ramit was the simplicity of automation, as I discuss here. Master this and you never have to worry about managing your finances again!

These weren’t books that anyone in my family suggested to me – or even could suggest to me. It was pure fate that brought me to these two gems. The goal isn’t to get your graduate to implement every single piece of information but rather to get them to be aware and start to think about these things. Have start early, so they don’t finish late!

Editorial note: And no I don’t think I’m slick I realize I’m posting Finance Friday on a Saturday…my bad!

Finance Friday: ‘I Do’, but…

The Duke and Duchess of Cambridge

I started this post during the royal wedding craze and was inspired by the ceremony and spiritual meaning behind the joining of two lives – but more so by the extravagant arrangements and jaw dropping costs. Reports estimate the royal wedding costs anywhere from $30 million to $70 million, with Brits footing the bill for security.  With an average US wedding costing close to $30,000 – peanuts to The Duke and Duchess I’m sure – most couples spend their honeymoon phase paying for that one special day.

Tia Mowry and Cory Hardrict

Ramit Sethi of I Will Teach You To Be Rich  suggests a foreign concept in his book by the same name (see Chapter 9: A Rich Life). Start to save for your wedding as soon as possible. Whether you are single or engaged, on the hunt or playing the field, if marriage is something you eventually see for yourself, why not start saving for the day now. I am willing to put in the upfront  leg work to have the wedding my future husband and I want. OK– I tried to include him but let’s be real, the wedding I want.

New Parents: Mariah Carey and Nick Cannon

This isn’t Project Husband, where you plan a wedding without a partner. But the concept and application of saving for your wedding as oppose to daydreaming about it will allow you the freedom to have the wedding your budget can afford. Heck! Saving now will allow you to have the wedding you might not otherwise be able to afford!

Say at eighteen you started putting away $50/month in a measly saving account earning you 2%. By twenty you’ve saved  $1,275.56. Wedding cake? Check!

Now say you continue to save another five years while you meet and fall for the guy of your most dreamiest dream. You’re earning  more so you increase your monthly saving amount to $100.

Final Savings Balance: $7,718.53

Ummm, looks like you have options when it comes to your wedding dress. Maybe even go to Kleinfelds for a private fitting. At twenty-five you have personally saved a significant amount for your big day. But because hubby-to-be is THE one he is on board with the luxe savings plan and decides to contribute too. You two are saving $300 month at a higher interest rate. By thirty, you would have saved:

Final Savings Balance: $29,386.29

LaLa Vasquez & Carmelo Anthony

LaLa Vasquez & Carmelo Anthony

Some of you may find this strange, unrealistic, time-consuming, blah, blah, blah. But you will be one of those people who overspends, overcharges or has to make those seemingly tough cuts to control costs. If you think you cannot afford to save now, how will you afford to spend later?

As a married couple your lives will be filled with many special days. Hopefully each one doesn’t cost you a fortune. But if you begin to really plan (and by plan, I mean save) for you big day, the result will be “a wedding where, the day after, you’re debt-free and can start your lives together“.

Shania Twain and Frédéric Thiébaud

For a simple savings calculator, click here.

P.S. It is really tough to find celeb wedding photos were the couple is still together…

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