Five money habits new grads should avoid |

Five money habits new grads should avoid

The economy is still bogged down and the job market is soft — not a great time to start out in the world. But don’t make it worse by getting your financial life off on the wrong foot and developing bad money habits. In no particular order, here is a list of money moves to avoid as you enter the real world.

Borrowing to buy things that lose value. Cars, furniture, appliances, tech gadgets — the value of these things is headed in one direction, and that’s down. Paying interest means getting hit twice, first by the value loss, then by finance charges. There are purchases where borrowing is justified: A home, a business, or an education can be among them because they at least have a chance of ultimately increasing your net worth.

Taking too little risk. While gambling is a fool’s game, keeping your powder too dry isn’t smart either. If you invest $500 a month and earn today’s insured savings rate of 0.5% for 30 years, you’ll amass $194,157. If you take a measured amount of risk, invest in ownership assets like stocks or real estate and as a result earn 8%, you’ll have $745,179.

Failing to save. According to a recent study by, 28% of people have zero saved for emergencies, and an additional 20% don’t have enough saved to cover three months of expenses. Start saving now.

Not keeping your credit in shape. You’ve heard it all before: A low credit score means higher borrowing costs, higher insurance premiums and more difficulty renting an apartment. A bad credit history could even affect your ability to land some types of jobs.

Ignoring insurance. You have to carry it and it costs a ton, but very few people take the time to understand the insurance they’re paying for or how they might pay less. Understand your options, review your insurance once a year, and make sure you’re paying as little as possible.

— Courtesy Money Talks News

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