Timely advice for graduates

Published 6:01 pm Saturday, May 19, 2018

Our business page here at the Suffolk News-Herald features a handful of rotating columnists, and one of those had a very timely column this week.

Independent financial planner Mark McGahee wrote about smart financial steps that recent college graduates should take. He mentioned everything from having an emergency fund to getting health insurance to avoiding credit usage and investing.

A lot of the advice hit home with me, because some of it I wish I had known when I graduated college, like thousands of young people across the state have done and will do this month.

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I was never that bad with money. My parents were sensible and frugal and taught me well. I never had the shopping bug, so I didn’t spend a lot of cash or run up a lot of credit-card debt. My parents and grandparents helped significantly with college, so I didn’t have a very large amount of student loans to pay off when I was through. I was able to pay them off quite early.

In short, I was very blessed.

But there were definitely things I wish now that I had known as soon as I finished college and some things I could have done better. What I loved about McGahee’s column was that he laid out many of those steps.

One thing I wish I had known is how amazing a Roth IRA is. And I wish I had known when I started working at 16 that you can start a Roth IRA as soon as you have income.

As McGahee said, if you put $250 per month into an account yielding 8 percent annually for 30 years, you will have $342,365 three decades from now. If you just kept all that cash in a plain account with no interest — maybe even under your mattress? Only $90,000.

Other traps McGahee mentioned that catch many young people are too much use of credit and not paying off debt early. Young people especially should avoid taking out unnecessary debt and pay off what they do have as soon as possible, paying more than the minimum payment whenever possible. Nobody wants to be paying student loans for 10 years.

One thing McGahee doesn’t mention that I can definitely say I regret — travel where you can, when you can, however you can. If you have the money, and you have someone to enjoy it with, go before time has passed you by and you regret it.