Well-th Blog

Talking To Your Graduate: Building a Plan for a Healthy Financial Future

By Hightower Advisors / June 7, 2024

Graduating from college is a significant milestone as it marks the transition into adulthood and independence. While it is an exciting achievement, it can also be daunting to suddenly be responsible for managing your finances. This can be especially concerning for graduates with student loan debt, as the average debt balance in 2024 is $37,088. You might be wondering how to help your child develop a financial plan that suits their current situation, aligns with their short- and long-term goals, and fosters good financial habits.

We spoke with Dr. Nathan Harness, Director of Financial Planning at Texas A&M University about how recent graduates can handle financial responsibilities such as spending, saving, budgeting, paying off student loans, and understanding employee benefits packages.

Steps to Financial Success for Recent Grads

Step 1: Knowing your financial situation

The first step in managing your finances is to assess your current financial situation. According to U.S. employer-reported data, the average gross salary for bachelor’s degree recipients from the class of 2024 is $68,516. With this in mind, students need to recognize their source(s) of income, how much they earn, and the frequency of their pay.

Step 2: Categorizing your finances

A great way to start budgeting is by categorizing your finances. This can be done by making two budget categories, one for spending and the other for saving.

Spending

Basic living expenses
Discretionary spending
Other expenses

Saving

Emergency Fund
Short- and long-term purchases
Retirement savings

Step 3: Pick a budgeting strategy

There is no one-size-fits-all method to budgeting as people have different financial statuses and priorities. Consider researching these three popular strategies to see if one fits your needs.

50/30/20 budget
Zero-based budget
“Pay yourself first”

Step 4: Put your strategy to work

The last step in financial planning is when you execute your strategy by actively saving, setting SMART goals, and tracking your habits and progress. While you might not always get it right, you must adjust when something is not working and learn from your previous mistakes to make better decisions going forward.

To dive deeper into this topic and hear Dr. Harness’ commentary on financial tips for recent graduates, watch Talking to Your Graduate: Building a Plan for a Healthy Financial Future.

Watch the Webcast

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