Simple and Life-Changing Advice for Graduates

Here's a simple, but profound piece from Yahoo featuring some money advice to graduates. The entire piece boils down to this thought from the author:

Try to live within your means, and save money.

She then gives some thoughts on how to do this:

I shared a tiny apartment with a roommate and cut my housing costs in half. I brown-bagged my lunch; walked or took the subway or the bus; ran outside instead of joining a gym; shopped sample sales in the Garment Center; and never took up smoking. I hung out with other people who were both fun and as poor as I was. By my late 20s, my salary had risen, and then I joined a gym, traveled without having to stay in hostels, ate out more often, and continued to save.

She also notes a money saving tip for today's graduates -- but one that has a fast-approaching deadline:

For anyone with student loans, here's a guaranteed way to save: Consolidate your debt immediately to lock in today's lower interest rates. Last week, the Department of Education announced that the rate on existing Stafford Loans will jump to 7.14 percent on July 1 -- a rise of 1.84 percent. The rate on PLUS Loans for parents will also climb 1.84 percent, to 7.94 percent. Someone with $20,500 in student loans would save $3,245 over the course of a 10-year repayment period by consolidating now, according to College Loan Corp., a San Diego lender.

This is simply excellent advice. Of any one principle, spending less than you earn is the key to wealth -- not only for graduates, but for everyone. If you master this concept, you can accumulate a large net worth. If you can't, it doesn't matter how much you make -- $165,000 a year, millions or even billions of dollars -- if you spend more than you make, you're going backwards financially.

To read more about graduate finances, see these posts from Free Money Finance:

• Graduate’s Guide to Finances

• Money-Related Gifts for Graduates

• Five Frugality Tips for College Grads

Comments

[Kira]

A lot of the articles for new grads suggest that you live like a college student for a few more years.. The only problem with this is that a lot of college students, aren't living like they are college students! Exhibit A, my alma mater finished building some crazy nice dorms basically the second I left. They are 1 to 9 bedroom apartments (the larger ones have two kitchens, two bathrooms, two living rooms, etc.) There is a Starbucks, a mini gym, a convenience store, and a parking garage all attached to this giant apartment building. All of the rooms have super-high-tech-jetfighter internet, free cable, double beds, and are all SINGLE ROOMS!! The kitchens have dishwashers and nice appliances, and everything of course comes furnished.

To give you an idea of what I think about this: my senior year of college, I lived in (literally) an 8x10 single room, and shared a bathroom with 5 people, and a kitchen with more than 80. I paid more than $4,000 for this piece of crap. My mother commented that the place I lived between graduating and getting a job (one room on the 3rd floor of an ancient duplex I shared with 4 other people) was the nicest place I had ever had.

Now, do you think the kids who live there are going to enjoy adjusting to the real world where they can only afford a studio, don't have three sinks in the bathroom, and have to buy their own furniture? It's not going to be pretty...