So, you got a job. Now what?

Take Charge America Offers 5 Steps for Recent College Grads

PHOENIX, Ariz. (June 2, 2006)... Armed with diplomas, tens of thousands of recent college graduates are now entering the job market. Landing a job, however, is only one step to a financially secure future.

Mike Sullivan, director of education of Take Charge America, a non-profit credit counseling agency, says it’s never too early for recent grads to put their earnings to work.

“It’s important for those entering the workforce to master the basics of money management whether they are making $20,000 or $100,000 a year,” said Sullivan.

He adds that one of the most important financial decisions that recent grads will make is already behind them. According to the U.S. Census Bureau, the expected lifetime earnings of a bachelor’s degree-holder is $2.1 million, whereas those with only high school educations are expected to earn $1.2 million.

Sullivan says, “A college education really does pay off—how well—often depends upon budgeting, debt management and investment skills.”

Sullivan has five steps to help recent grads take their best financial steps forward:

• Pay Off Credit Card Debt – Weekend road trips and late-night pizza binges aren’t quite as satisfying once you receive the credit card bills. If you’re still plagued by college credit card debt, make it a priority to pay it off. Pushing it off longer or paying it down slowly means that you’ll be shelling out hundreds or even thousands of more dollars in interest down the road.
• Lock in Your Student Loan Rate – On July 1, the Deficit Reduction Act of 2005 takes effect. Experts say it will cause interest rates on federal education loans to change from variable rates to higher fixed rates. That means students who don’t lock in rates prior to that date could end up paying thousands of more dollars over the life of the loan, compared to current rates.
• Save for Retirement – Sign up for your employer’s 401k plan as soon as you are eligible. Money is taken out of each paycheck, and it will grow tax-free. Often times, employers match your contributions. Mutual funds and IRA’s can provide an additional financial cushion, and they do not require large sums of money to open.
• Start Saving for a Home – Take a fixed amount of money from each paycheck and deposit it into an interest-bearing account to later use for a down-payment on a home. Next to a college education, purchasing a home is also one of the most important investments you will make.
• Stash Some of It – A common financial mistake among young adults is that they don’t stash away any cash for emergencies. Illnesses, car problems and job losses are just a couple of life’s unexpected turns that require extra funds. Try to save up at least six months of living expenses and don’t touch your stash unless it’s really an emergency.

About Take Charge America
Founded in 1987, Take Charge America, Inc. is a non-profit organization headquartered in Phoenix, Arizona. TCA offers a variety of services including financial education, credit counseling, and debt management. To learn more about TCA or its programs please call 1-800-823-7396 or visit www.takechargeamerica.org.