Tyler Reedman and Jason Gabrieli discuss how you can best manage your money after graduating. If you have recently graduated or are in an early stage of your career - then you are in luck. Although it might not be on your radar right now, investing is a time game. The faster you get your finances in order and start managing your money correctly, the more money you can make throughout your life.
This episode touches upon all the basics that you need to keep in mind when managing your money early in your life.
Tune into this episode to learn:
- Two main things you can do to future-proof your spending.
- The difference between good debt and bad debt.
- Which debts you should pay off first.
- How much money you should be saving to have the retirement you dream of.
[00:30] Managing your money after graduating
[02:08] How recent college graduates should start budgeting
[03:28] What’s the difference between good debt and bad debt?
[04:57] Divide your savings into these TWO buckets (our universal recommendation).
[07:02] How much do you need to save to have enough money for retirement?
[08:02] What is lifestyle creep or classflation?
[08:42] How saving money early makes you more money (Warren Buffet story).
[11:00] What you must do BEFORE you spend any money.
[12:10] Paying down your student debt.
- Be very honest with yourself about what is important to you. It is important to be very clear about what your life goals are before you start creating a budget or financial plan for yourself.
- There is a difference between good debt and bad debt. Good debts are debts that allow you to eventually increase your income or build your wealth. Examples of good debt can include student loans and mortgages. Bad debts include credit cards and car loans. Get rid of bad debts as fast as you can.
- To build a responsible financial future for yourself, have two main savings buckets: a short term bucket and a long term bucket. The short term bucket is your emergency fund. Have 3-6 months of your expenses in cash in your short term bucket (emergency fund).
- Retirement is a pretty new concept to humans. We used to just work until we died. This is why we are not really built for delayed gratification.
- Lifestyle creep is when you keep increasing your cost of living as your income increases.
- Pay yourself first. Before spending any money, put money in your savings vehicles and contribute to paying down bad debt.
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Connect with Tyler Reedman: LinkedIn
Connect with Jason Gabrieli: LinkedIn
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[03:28] “Not everybody knows this but it is also important to mention that there are good debts but there are also bad types of debt. So, when we talk about good debt we are generally talking about anything that helps to build wealth or potentially increase your income over time” - Tyler
[05:29] “One of the things that we pretty much universally recommend is to start with two buckets essentially. One is a super short term bucket and one is a super long term bucket; and the super short term bucket is all about planning for emergencies.” - Jason
[07:12] “If you can save 10% of your pay towards that super long term goal, whether your employer has a 401k or you open a roth IRA or some kind of IRA on your own, if you could hit 10% of your pay into that savings vehicle for retirement you are really doing well.” - Jason
[08:46] “Every dollar I am saving now is going so much further than a dollar that I am saving 30 years from now; and you and I know that is because of compound interest which, if you don’t know, is basically earning interest on interest.” - Tyler
[11:49] “Pay yourself first. That’s really what it’s all about. It’s about prioritizing paying down debt and saving BEFORE you get to the part where you spend your money and there’s no better time to start that than when you first get started in your career and you first have a salary because hopefully that’s a habit that carries you the rest of your life.” - Jason