Dear Graduate,

Congratulations on receiving your degree! This is a testament to the commitment, determination, and hard work you put into your education.  If you are fortunate enough to land your first real job, you’re well positioned to embark on an exciting, worthwhile and successful career. With all the immediate and competing priorities that arise in early adulthood, it can be difficult to think about organizing your financial affairs for the future. Here are some tips on how to manage your finances effectively:

1. Spend within your means. Do your best to make sure your income is always greater than your expenses.

2. Save first. It is a good idea to allocate a portion of your income to savings first, even if you have to start small, before budgeting with the income you have left over.

3. Avoid debt. While debt can be used responsibly, interest is a cost that needs to be paid on a regular basis. These interest costs will impair your ability to make regular contributions to your savings. Moreover, increases in interest rates are always possible.

4. Keep it simple. You don’t need to over-complicate your financial planning. The more complex your finances are, the harder it will be to stick to them, so keep them as straightforward as possible.

5. Avoid high-flying opportunities. The potential for high rewards often comes with high risks, so be wary of highly risky opportunities. Unless you have done your homework and fully understand what you are getting into, be cautious. As the saying goes, if it sounds too good to be true, it probably is.

6. Keep taxes in context. Early in your career, you’re likely paying less tax due to a lower level of income. As your income increases, so will your tax obligations, which can be irritating. You might feel tempted to shift focus to tax minimization strategies. However, while paying less tax is appealing, don’t let that effort steer you into subpar investments.

7. Avoid letting the media guide your decisions. It’s important to keep up to date on the current state of the investment landscape, but try to get your news from unbiased sources. Be sure to do your homework or talk to a trusted advisor prior to making a major investment decision.