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: 8 money lessons for the class of 2022

Congratulations, you’ve made it, you’re a new college graduate. Now it’s time to head out into the working world. You will be earning money and getting a regular paycheck. Along with earning money comes responsibility. 

Here are 8 money lessons for the class of 2022. 

Live within your means 

Getting your first real paycheck can be exciting. It’s tempting to buy the things you might not have been able to afford as a college student. It’s OK to splurge a little bit, but it’s more important to understand your financial boundaries and live within your means. 

Establish a monthly budget 

A great habit to establish early on is to develop a budget. What comes in each month and what goes out? On the income side, your primary item will be your paycheck. If you have some sort of side hustle that generates consistent income, be sure to include this as well. 

On the outflow side, take a look at everything you spend during the month. Items such as housing, food, a car payment, student loan payments and other fixed expenses should be part of your budget. Likewise with items like food, entertainment, gas and others that might vary a bit should also be included. 

Be sure to include income taxes in your budget by having an appropriate amount withheld from each paycheck to ensure that you don’t come up short at tax time. 

Track your spending 

One of the best ways to help ensure that you are living within your means and that you are adhering to your budget is to track your spending. Having a budget does no good if you don’t stick to it, in order to determine whether you are on track it’s important to track your spending. This way you will know if you overspent in one area that you may need to cut back elsewhere that month.This can be done via one of the many budgeting apps available or via an old fashioned excel spreadsheet.  

Save for a rainy day

Stuff happens, often when we are least prepared for it. An emergency fund can help offset those unexpected bills like a big car repair or needing to buy a new laptop when yours crashes. Perhaps more important, the fund can help tide you over in the event of an illness or a job loss. 

One popular rule of thumb says that you should have 3 to 6 months worth of your ongoing basic monthly expenses set aside. Whether or not this is the right amount is open for discussion, but starting out it’s a good idea to set a portion of each paycheck aside in a liquid account like a savings account to build up an emergency fund.  

Save for retirement 

While retirement might seem a long way off in the distance, one of the biggest advantages you have is a long time until retirement. The ability to have your retirement contributions compound over a period of 30 or 40 years or longer is a huge advantage. 

If your employer offers one, the easiest way to get started investing for retirement is by contributing a portion of your salary each pay period to the company’s 401(k) or similar retirement plan. Contribute as much as you can, but at least start with something. Even if the amount is minimal, try to increase the percentage of your salary that you are contributing each year. If your employer matches your contribution, try to contribute at least enough to receive the maximum match as this is essentially free money. 

If you are uncomfortable choosing your own investments, many plans offer a managed account option like a target-date fund

In addition to an employer-sponsored retirement plan like a 401(k), you can contribute to an IRA. A traditional IRA can provide a tax-break on your contributions, Roth IRAs offer the opportunity for tax-free withdrawals in retirement. 


It’s a good idea to start investing in a taxable account beyond what you are contributing to your 401(k) or other workplace retirement plan. While 401(k)s and IRAs are great retirement savings vehicles, the money in these accounts is not easily accessible prior to retirement. 

Investing in a taxable account provides diversification in terms of the types of accounts and the tax treatment of those accounts. Investments held in a taxable account can be withdrawn without the penalties that accompany a 401(k) or IRA. A taxable account can be an ideal way to save for goals that are a few years off, but not as far off as retirement. Examples might be saving for a down payment on a home or buying a new car. Additionally, investing in a taxable account is a good way to build wealth over time. 

There are a number of ways to do this. Major brokerage firms like Fidelity and Charles Schwab offer many ways to invest in a range of investments such as stocks, mutual funds and ETFs. With the advent of partial shares of stock investing is even easier. Many brokers and mutual-fund companies like T. Rowe Price and Vanguard offer auto investment options that let you start out small and increase the amount you invest over time. 

Give back 

One of the rewards for doing well in life is giving back to others who are not as fortunate. Giving to charity is one of the most rewarding things you can do with your money. Even in small amounts, every donation helps others in need. 

Enjoy yourself 

A key money habit is setting aside some money to just enjoy yourself. This might mean going out for dinner to your favorite restaurant, seeing a play or attending a sporting event. It might just be going out with friends for a beer. 

We all work hard, it’s important to take some time and money for what you enjoy every so often. 

These money lessons will provide a solid foundation for your money journey as you graduate and as you move through the various phases of your life. 

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