As my sister prepares to obtain her medical degree from next week, she retains send me its about money. She should try repay its massive loans or save for retirement? It would be better to save money in a bank account or a Roth IRA? Should she get her credit report, and what is the best way to make a budget?
Its questions inspired my story this week about errors top money what do college graduates. They include taking too much debt (or not enough), spending heavily on upgrades of life and begin to save and invest on hold. After the warning, my sister on these common errors, I also made a list of things she must do. (This was not the first time; see advice for the young doctors).
The first step, I was to organize. When she came in to speak of money, she brought a three ring binder full of paperwork on his students, credit card loans and other accounts. I suggested that she put more online, so that it had less to carry and sort. Most banks let customers almost all online, eliminating the need for paper statements (and filing). Since it is subject to move across the country, less the things she has to carry, the better.
She has created an account at Mint.com and loaded his various accounts so that it could start monitoring its expenditures more easily. Free Web site also allows users to implement specific savings goals and create alerts when expenditures in a single category becomes too high. "It is wonderful to have at the same place and to track my expenses and get the updates," she said. Many banks also offer free tools online through their own Web sites.
Second, I suggested that she get her school to do some work for it. It lacked the information key on some of its loans to students, including owned them and what were the rates of interest (and how these rates may change over time). A meeting with the school financial aid office could help sort them all that out. Once she understood the details, it could lead to a plan for the payment of these loans, starting with the most expensive, or make arrangements to consolidate their. (It does not have a credit card debt, but if it did, it pays would have been the first priority). [See the best credit cards for new college graduates].
His future employer he also owed some information. It was not yet certain of its health insurance options, retirement or other non-salary benefits essential benefits. These benefits can be worth much; She did not want to ignore them.
While many new graduates may negotiate their wages themselves, people in more stringent health such as my sister professions, or other jobs that pay grade is usually determined by a formula and is the same for all the worlddo not have this option. There are still places to be warned, however. New employees can be sure to take advantage of all available benefits, including health insurance, accounts of pension benefit by the tax, flex, plans, expenditures and else Office offers human resources.
Third, she needed savings goals. Of course, she knew she wanted to save for retirement at any given time, but should how this objective is consistent with its other savings goals, such as the creation of an emergency fund and save travel and other objectives? There is no good answer here, but I suggested that it open a retirement account immediately if his employer provides a benefit, especially if it matches all contributions. But instead of optimizing out on retirement savings, it should balance with the need to create an emergency fund account.
After putting worth three months of expenses in this account, it could decide to put more in the retirement account or save more for other purposes, including international travel. In the five to ten years, it will also likely discover some major events of life, including the purchase of a House and found a family. Padding of his bank account today will help make these events - happier and less stressful.
In regard to where it should keep these economies, I suggested putting most of its pension fund in index funds that reflect the stock market, since it has a lot of time before retirement, and then to keep his more immediate savings in a low savings account risk. Interest rates are low, of course, but if you need quick money, you do not want losing against the risk. After the accumulation of emergency fund, while she alors qu' elle pourrait pourrait wanted to examine some of these savings term more long shift to more aggressive investments.
Finally, I told him that she should check his credit free at annualcreditreport.com, just report to verify that nothing would raise red flags. If she buys a house in the near future, it is not to be surprised by problems when it is shopping for a mortgage loan.
My sister actually took most of my advice. Sign at Mint.com, it met with the financial aid office and received the answer to all his questions. Shortly after his arrival in his new city, it plans to ask his new employer, Hospital University big, on the benefits of retirement. And when she shot her credit report, she noticed a strange address, so that she had removed it.
And now that she is a doctor, she promised to answer all my medical questions urgent in return. I think I am certainly the one that comes out ahead in this Exchange.
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