The Spring semester is coming to a close, and we wanted to wish the best to the graduating class at North Park University and around the world. We know that as graduates prepare for the next phase of their lives, personal finance and money management will become a bigger responsibility.
With this in mind, Covenant Trust Company employees and North Park University Alumni wanted to share some of the things we wish we knew about money when we graduated from college. (Of course, this info isn’t only for graduates — there is wisdom here for people for all ages, regardless of where you are in life). We hope that these tips will help graduates form a strong financial foundation and build healthy money habits right away: that years from now, they too won’t wish they knew these things when they graduated from college because they did know them — and put the info to good use!
Terry Almquist, North Park College (University), Class of 1960
A dollar not spent is worth more than a dollar earned. (A dollar earned is taxable and a dollar not spent has potential for growth.)
Einstein was right: compound interest is the most powerful force in the universe.
Just because someone tells you that you can afford to buy something does not mean you should buy it.
Bill Hickman, Class of 1970
The secret of a long, happy and successful life (personal and financial) is self control.
You should save, give, and spend the resources that God has entrusted to you.
Follow life’s guide in Proverbs. It’s the “How To” manual of life. It applies to your personal life as well as your business life.
Develop a relationship with the Lord, he is your best friend and council.
Michael Jozefiak, North Park University, Class of 2004
Establish credit if you haven’t already. Things like an unpaid cable bill in your name will come back to haunt you. Check your credit history and clean it up. One day you may be able to afford a new car or even a house and good credit could save you a lot of money on interest rates.
When you get your first job, be sure to contribute as heavily as possible to your retirement plan and take advantage of all matching or other incentives.
SAVE YOUR MONEY, SAVE YOUR MONEY, SAVE YOUR MONEY! There are things you will need down the road that are more important than beer and a huge TV.
Treat savings as a bill every month. It’s the “pay yourself first” mantra. If you don’t, you will never save. (2)And treat a retirement savings plan and Roth as a must do. Contribute to a 401(K) or 403(B) at least as much as the employer match. (3) And never spend it when changing employers. It may seem like nothing because of smaller amounts when with an employer for only a few years, but withdrawing it each time they are changing employers (rather than rolling it over) will keep it from ever accumulating.
James Engwall, North Park University, Class of 1963
I would have wished to have a far better background in investable assets like stocks, bonds, etc.
Stay away from credit cards and credit card debt. You only need one credit card.
As a college student, I was broke. When I graduated, got a job, and had an income, it was then time to have all the things I had done without. I was blessed to come out of college without much student loan debt, but I very quickly piled up credit card debt buying things like furniture, electronics and all the stuff I had done without during my four years of college.
Barb Wood, North Park University, Class of 1979
I wish that I had known how to create a budget and how to work within that budget.
I also wish that I had understood how quickly you can get in over your head with a credit card, how long it takes to get out once you are in over your head, and how to manage the convenience of carrying a card, but spending as if I only had X amount of dollars and sticking to that amount. (Statistics say that when shopping, those who use cash spend less than those who use a credit card. It is too easy to lose track of how much is in the cart when we know we can just pay with a credit card, rather than we have X amount in our wallet.)
I wish I knew about the power of compounding. Even saving a small amount of money in your 401(k) or 403(b) plan can add up over time. Especially save at least the amount that will be matched by your company. Never turn down free money!
John Lindahl, North Park University, Class of 2008
I wish I would have set up an IRA earlier to have taken advantage of compound interest and significant market gains!
I wish I had understood the importance of saving for retirement. I was fortunate enough to have employment that would have allowed me to save, but I felt immediate financial needs were more pressing. It was not until I was in my thirties that I awoke to the fact that if I did not start saving for retirement, I would not be able to retire comfortably. Even if it is only $50 per month, begin immediately and save consistently. Do not let present urgent needs keep you from recognizing the important need to begin saving for retirement right now.
Although not easy to do at college graduate age, I wished I had appreciated the importance (and habit!) of saving—even if it’s a small amount at first—and being more future-focused, defining and understanding ‘wants’ and ‘needs’ and how to honor both appropriately.
Josh Myers, North Park University, Class of 2005
I wish I had understood the impact of saving a little bit from each paycheck. It’s a cliché for good reason. It’s amazing how quickly you can accumulate money when you get into the habit of saving a set amount every two weeks.
Karen Palmberg, North Park University, Class of 1979
Your spending will always adjust to your income no matter what you make. If you don’t make a decision on what percentage of your paycheck you will faithfully put into savings every month, you will soon believe that you don’t make enough to save anything.
Congratulations to all the graduates! We wish for success in the next phase of your lives. If you have any financial tips that you would like to share, please leave a comment below or on our Facebook and Twitter page.