Question

What advice might a personal financial advisor offer a recent college graduate desiring to become financially secure?

Answer 1

Ans. There are 5 best steps for recent college student graduate desiring to become financially secure are as follows:

Step:-1 Identifying Financial Goals

The first step is to recognized that success in a capitalist system requires capital (money) to invest. This is accomplished by having a job and spending less than you earn. Your financial goal will help you how you should manage your finances. There are many goals in life some are short term goal i.e..., bike, car, vacation etc. and some are long term goal i.e..., house etc. So, Make your list of important goals and invest the money according to meet your financial goal.

Step:-2 Make A Budget

When you received your first income or another you may divide it in 50:30:20 ratio. In which 50% towards needs, 30% towards wants and 20% towards saving or investment to became a financial secure. You may increase the investment percentage to decreasing your unnecessary wants. Once the graduate has money to invest , a capital generating strategy requires that the first five or six years after graduation, the graduate should live frugally. The lifestyle is one of sacrifice, not luxury.

Step:-3 Manage Your Debt

The third step is manage your debts. Many graduate taken student loans that will be weighing them down for year to come. Student loans often have multiple tranches with varying interest rates that can be fixed or variable. So, manage the debts as per your income and decrease your unnecessary expenses.

Step:-4 Prepare for Emergencies

An emergency saving account is the best way to plan for the unexpected. What would you do if you lost your phone or your laptop stops? People often go into debt to cover unexpected expenses, but it's a problem that can solved with a little planning. You man save a small amount every month in your saving account for Emergencies.

Step:-5 Investing the Money

Smart saving can preparer college graduates for emergency fund or other small funds, but investing can prepare them to be millionaires. Some common investment tools are bonds, stocks, mutual funds, exchange traded funds, real estate and commodities (gold, silver, etc.). Bonds are safest securities to invest. Stock is most popular and profitable tool of investing but it will be highly risky. The mutual fund is ideal for new investor.

Hence, a recent graduate student can follow each step to become a financially secure.