MILWAUKEE (BUSINESS WIRE), May 16, 2011 - No more classes, no more books… and not much time before those student loans are due. As college students graduate across the country, Northwestern Mutual – a leading financial security company – is offering tips to help young adults get off on the right financial foot.
“Universities don’t give degrees in personal finance, and graduates aren’t necessarily equipped with the right knowledge to build a strong financial foundation for their future,” said Meridee Maynard, Northwestern Mutual vice president. “That’s why now more than ever it’s important to take proactive measures to develop good financial habits early. We need to recognize that financial security is a marathon – not a sprint. It’s important to utilize financial strategies that will endure for decades to come.”
What steps can college graduates take? Northwestern Mutual recommends the following strategies for recent grads to start on the path to financial security:
- Avoid excessive debt: Many recent graduates are saddled with student loans, and credit card debt is an easy financial trap to fall into. Avoid spending beyond your means and use a credit card only for fixed monthly expenses, such as your rent or cell phone bill, to establish good credit. Develop a plan to pay off the student loans quickly and build it into your monthly budget.
- Start saving early: According to the U.S. Department of Commerce, Americans are saving only about five percent of their disposable income, considerably short of the 10 to 20 percent experts recommend setting aside before expenses. Start saving early to take advantage of compounding interest, and utilize mutual funds or your employer-sponsored 401(k) for your long term goals.
- Live on a budget: Smart personal finances start with a budget. Track your income and expenses with a monthly budget, and set aside at least 10 percent of your paycheck for future needs. Check out Northwestern Mutual’s “How much am I spending” calculator to get a better idea of where your money is going.
- Know your employee benefits: Starting your first job? Employers offer a range of benefits, such as health insurance, education assistance, 401(k) programs and flexible spending accounts, which are put in place for employees. Learn about and take advantage of these benefits that make sense for you.
- Work with a financial professional: Financial planning is a helpful exercise to identify and evaluate your goals for the near and long term. It is important to work with a trusted financial professional that will help identify solutions to meet your needs and establish a plan to help you reach your long-term goals.
“The choices you make when you’re younger can have long-lasting financial implications for your future,” continues Maynard. “My advice to graduating seniors is to protect what you have, take control of your cash flow and invest wisely. Take the opportunity to start off on the right foot with smart financial decisions today, and set the stage for your financial security tomorrow.”
About Northwestern Mutual
The Northwestern Mutual Life Insurance Company – Milwaukee, WI (Northwestern Mutual) is the “World’s Most Admired Company” life insurance company in 2011 according to FORTUNE® magazine, has helped clients achieve financial security for more than 150 years. As a mutual company with $1.2 trillion of life insurance protection in force, Northwestern Mutual has no shareholders. The company focuses solely and directly on its clients and seeks to deliver consistent and dependable value to them over time.
Northwestern Mutual and its subsidiaries offer a holistic approach to financial security solutions including: life insurance, long-term care insurance, disability insurance, annuities, investment products, and advisory products and services. Subsidiaries include Northwestern Mutual Investment Services, LLC, broker-dealer, registered investment adviser, member FINRA and SIPC; the Northwestern Mutual Wealth Management Company, limited purpose federal savings bank; and Northwestern Long Term Care Insurance Company; and Russell Investments.