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Financial Advice

Personal Finance Tips and Advice for Recent College Graduates

Morningstar's investing specialists recommend saving for retirement early, negotiating your starting salary, and more.

What's one of the best parts about graduating from college?

Morningstar's columnists and specialists are here to tell you what they wish they knew when they graduated. Here are their words of wisdom, personal finance tips, and more for college graduates.

Saving Money Tip: Save When You Can, Where You Can

"When you're just starting out, saving for retirement seems hopelessly abstract. It's incredibly hard to prioritize it over other financial goals such as buying a first home or taking a big trip. So here's some advice: As much as it's valuable to start saving for retirement as early as you can, simultaneously set some shorter-term financial goals and hit them. Scoring smaller financial victories will help you buy into the value of saving in a way that saving for retirement—a far off, abstract goal—may not."

Christine Benz, director of personal finance and retirement planning

"Whether your company offers a 401(k) or a 403(b) plan, invest in it as soon as you can. By doing so, you're setting yourself up for investment success. How much you save and how long you save are the one-two punch of a winning approach for building wealth for retirement. And if your company matches some or all of your contribution, all the better!

"Appropriately invest your retirement plan contributions. Don't let your contributions sit in a low interest cashlike account because you don't know where to invest them. If your company doesn't default you into the plan's target-date vehicle that's closest to your retirement date (which may be hard to think about, considering you're just entering the workforce), put the money there yourself. As time goes on and you build your retirement kitty, you may decide to diversify beyond the target-date option. But it's the best place to start."

Susan Dziubinski, director of content

"Contribute to your 401(k) as soon as you can. Even if you think you can't afford it. It doesn't hurt as much if it comes out of your check before you see it!"

—Sylvia Hauser, senior copy editor

"I keep my retirement portfolio very simple. It's a broadly diversified group of passively managed funds across major asset classes. Being consistent and not overcomplicating things have given me the peace of mind to know that I should be in decent financial shape if I ever decide to retire."

Amy Arnott, CFA, portfolio strategist

Spending Money Tip: Find Balance and Spend Mindfully

"Listen to the quiet voice inside. It's easier said than done, but one thing I wished I knew when I was younger was that the obvious trappings of success—making more money, managing a bunch of people at work—wouldn't necessarily confer more happiness. Don't assume that each rung up the career ladder will be worth climbing. Ask yourself, "Will I dread this job on Sunday night, or look forward to the week ahead?" Sometimes there will be alignment--the remunerative job will be fun and worthwhile. But sometimes there won't be. Err on the side of fun and worthwhile.

"Your 'time on earth allocation' is more important than your financial allocations. There's no shortage of information about how to manage your financial assets—how to set an asset allocation and select investments, for example—including on But there's less guidance on managing what's a more precious resource by far--our time on earth. Life goes by so quickly, so it pays to edit ruthlessly when thinking about how to spend your hours and days."

—Christine Benz, director of personal finance and retirement planning

"Stuff is just stuff. Focus on experiences. When we first start to earn, we all have the urge to buy whatever we can afford, and I certainly went wild spending as much as (and sometimes more than) I could afford. Many others on this thread have said you should start saving early, and you should. But when it comes to spending, my advice would be to spend intentionally. I've learned that I don't necessarily remember the must-have phone, or car, or on-point outfit on which I splurged after I began earning, but I do remember every concert, every backpacking adventure, and every budget road trip, even the flea-infested ones. Focus on experiences, the memories will last much longer than the latest AirPods."

-Ruth Saldanha, senior editor at

Personal Finance Tip: Advocate for Yourself

"Negotiate for the best starting salary you can (within reason). Don't lowball hoping to wow them and get a promotion later. All your subsequent raises and bonuses are going to be anchored on your starting amount. Figure out what your skills are worth, and don't short-change yourself."

-Sarah Newcomb, behavioral economist

"Network—I don't mean in any artificial way. I mean, get out there, chat with people outside of your department, learn as much as you can about what other people at the company do. Learn about both their functions and the personalities of those departments.

"Of course, make your boss happy. Your boss is the single most important person for your starting career. But don't put all your eggs into that one basket. Through your actions, make yourself as visible as you can to multiple decision-makers. You want to have several important people advocating for you, not just one."

John Rekenthaler, vice president of research

Financial Planning Tip: Establish Good Habits—Money and Otherwise

"Do not let your credit card balance exceed one month's net pay. Credit card debt will silently strangle your finances."

Sylvester Flood, chief content strategist

"Remember that federally funded student loans are considered 'good debt,' and paying them off early isn't necessarily your best financial move. If you can consolidate your loans at a low interest rate, and your payments are manageable, then you can carry that debt for a long time without it hurting your credit or your lifestyle. The rule of thumb here is that if your interest rate on student loans is around 6% or lower, you're probably better off investing your extra cash rather than paying that debt down faster."

—Sarah Newcomb, behavioral economist

"Live beneath your means. This doesn't sound like much fun. But given that many young graduates already carry student loan debt, don't take on more debt by spending more than you make. Make sure you have the income you need to cover your bills, set up an emergency fund, and begin to build a retirement kitty. And then treat yourself to those Lollapalooza tickets."

—Susan Dziubinski, director of content

"Get in the habit of voting. Less than half the Americans aged 18 to 29 voted in the 2016 presidential election, a much smaller turnout than overall. However dysfunctional the system looks to you, vote so that you can effect change. Vote in local elections as well as national ones, and during the midterms, too. Let your elected officials know about priorities like climate action or healthcare."

Leslie Norton, editorial director, sustainability

Career Advice: Be Flexible

"Don't get overwhelmed by trying to choose a lifelong career when you're in your 20s. My original plan when I started out as a fund analyst at Morningstar at age 22 was to try things out for a couple of years and then figure out what to do next. I was lucky to end up in a great company that I've stayed with for nearly my entire career, but I've also tried out many different roles over the past 30 years. I even left Morningstar briefly to work as a financial advisor for another company. Experimenting with different roles has allowed me to find strengths I never knew I had, fine-tune what's important to me, and discover the sweet spot between what I’m good at and how I can contribute to empowering investors."

—Amy Arnott, CFA, portfolio strategist

"Seek out the widest margin between opportunity and cost of living when you're starting out. Do not hesitate to go overseas for this. I graduated into the recession that followed the financial crisis with the goal of a career in journalism, and there were very few opportunities in North America. I ended up in Hong Kong with a two-hour commute, including a boat ride, each way. What I did during that commute (meals, work, podcasts) was within my control, my rent was manageable, and the opportunities were world-class. After a few years, I was able to eliminate that commute, return home, and begin to build the daily routine that I wanted. If you're interested in going overseas, consider graduate/postgraduate programs, especially if they come with a scholarship. Sometimes you can live on campus, the schools often help on the financial side and may get you started with an entry-level job. Employers also value international experience, which is a form of human capital and education and will benefit you for the rest of your life and career."

-Andrew Willis, content editor for

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