GIVE YOURSELF A GRADUATION GIFT THAT KEEPS ON GIVING
Texas CPAs Offer Tips to Help College Grads Gain Financial Independence

DALLAS — Graduation for millions of college students means its time to trade in books and binders for bills and budgets. The Texas Society of Certified Public Accountants provides the following advice to help college graduates become financially independent.

MOVE BACK HOME?
There are two schools of thought when it comes to moving back in with your parents after college. Some believe that it’s best to live independently. Others maintain that by living at home for a year or two and saving money, you can get a head start on a financially secure future. A lot depends on your circumstances, including whether you have any savings to use in setting up a new residence. If you have little to no financial resources, it’s best to stay at home and discipline yourself to save the money you will need to move out.

LEARN HOW TO BUDGET
As a student, you were probably used to living on the cheap. Once you have a job and a steady paycheck, you may be inclined to overspend. That’s why it is so important to create a budget to guide your saving and your spending patterns. Download a free budget worksheet from www.ValueYourMoney.org, and fill it out. There also are plenty of personal finance books and Internet sites with advice on creating a budget that works for you.

PAY YOURSELF FIRST
Get in the habit of setting aside a specific amount of money each month for saving or investing. Don’t pay everything else first, with the intent to save what’s left over.

One effective strategy is to sign up to have funds automatically deducted from your paycheck or checking account and deposited into a savings or investment plan.

PLAN FOR THE UNEXPECTED
When you’re just starting out, the money you set aside each month should be earmarked for an emergency fund equal to roughly six months worth of living expenses. An emergency fund means you won’t have to resort to your credit card if your car needs major repairs or you lose your job. Keep emergency funds in a savings or money market account – both are safe, liquid investments.

GET OUT OF CREDIT CARD DEBT
Many college graduates leave school with thousands of dollars in credit card debt. If you’re one of them, follow a payment plan and pay off debt on the highest interest rate cards first. Don’t fall into the trap of paying only the minimum monthly amount due – that strategy could cost you a great deal in interest.

PRESERVE YOUR CREDIT
Remember – your diploma may be your ticket to a good job, but your credit report is your ticket to borrowing money for a home or car. Always pay your bills on time.

UNDERSTAND STUDENT LOANS REPAYMENT OPTIONS
Be sure you understand the rules regarding student loan repayment and the options for consolidating your loans. Consolidating several student loans into one refinanced loan reduces your monthly payment and makes debt repayment more manageable.

But if you choose to extend your repayment term, bear in mind that it will take longer to pay off your loan balance and you'll pay more in total interest.

SAVE FOR RETIREMENT
Retirement may be the furthest thing from your mind when you start working, but saving even a small amount while you’re young can grow into a sizeable nest egg. If your employer offers a 401(k) plan and matches a percentage of the money you contribute, try to contribute at least enough to take advantage of the match. If you don’t, you’ll be throwing away free money. A traditional or Roth IRA (Individual Retirement Account) is an alternative if your employer doesn’t offer a 401(k).

ASK FOR ADVICE
A meeting with a CPA is a great way to map out a long-term financial plan that will help you create a strong financial future.

PERSONAL FINANCE INFORMATION
For specific personal finance information for your stage in life, visit www.ValueYourMoney.org. While there, sign up to receive a free monthly electronic newsletter with personal finance tips on variety of topics.

ABOUT TSCPA
TSCPA (http://www.tscpa.org) is a nonprofit, voluntary, professional organization representing Texas CPAs. The society has 20 local chapters statewide and has 27,000 members, one of the largest in-state memberships of any state CPA society in the United States. TSCPA is committed to serving the public interest with programs that advance the highest standards of ethics and practice within the CPA profession.