Paper Chase: Congratulations Graduate, Good Luck
What’s next for you financially?
The GDP grew 0.2% in the first quarter which was far below analysts expectations. The economy was probably also slowed due to the strong dollar, cold weather, weaker oil prices.
The Fed acknowledged the slowdown in the economy in their last meeting, but provided no clarity as to when they would raise rates. Their next meetings are in June and September.
Economy
We are in a weird transition right now. While the energy renaissance had spillover, the impact of lower oil should go back into the pockets of consumer product. What we haven’t seen yet is those pocket savings translate into consumption.
Retirement Savings
We are not saving enough for retirement
The typical American family spends more time planning vacation than on their finances. Someone has to take responsibility for understanding taxes, budgets, savings and investments. We must promote education that leads to greater financial literacy.
Lessons In Dollars and Sense
The average high school graduate currently is ill-equipped financially to start college. The cost of education as far as student loans, and who has the responsibility for other costs needs to be determined between parents and college bound students. Establishing a budget is a must. Credit cards are not as pressing an issue now for you have to be 21 or older or have established income to get a credit card. Parents can co-sign for children, but a debit or prepaid card is most likely a better option.
Student Loans
The idea is to pay them back on time and as quickly as possible. There is a six month grace period after graduation for federal loans, and you want to pay at least the minimum in order to lower the amount you have to pay over the life of the loan. Information on income-based repayment plans can be found at studentaid.ed.gov
You want to set a time limit or discussion with how long you are staying at home with your parents or how long you are allowing your kids to stay with you. Spell out expectations and create a financial plan as to make sure you do not jeopardize your own financial future.
