Basic financial tips for college grads

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The tassel is moved, the books are packed up, and the job search is on. Congratulations on completing that hard-earned diploma. As the last strains of Pomp and Circumstance fade away, consider a few simple but extremely powerful financial habits to cultivate now that are practically guaranteed to repay you many times over.

Manage debt with relentless diligence. Borrowing can be a useful and sometimes necessary instrument in your financial toolkit. But far, far too many young adults start out with a tremendous handicap by amassing too much debt early on. Nearly two-thirds of graduates tote along student loans, with an average balance of $27,000. Be sure to understand the repayment terms now that you are out of school, and attack the outstanding balance with a vengeance. If you find yourself unable to meet your payment obligations, contact the lender immediately to arrange an accommodation. Remember that student debt is not cancelable even in bankruptcy, and the interest stacks up quickly.

Resist the temptation to reward yourself with a brand new car or expensive vacation if it means running up debt. Always pay off credit card bills in full each month, or choose not to charge in the first place. Carrying a balance on retail credit cards is a major wealth-zapper.

Begin saving today. Retirement no doubt seems like a distant and hazy concept. The great thing about a goal so far in the future is that time is your biggest ally. Establish the virtuous habit of setting aside a small amount from each paycheck, beginning with your first one. Try forgoing the expensive latte and limit meals at restaurants; just $10 per day set aside over the next 40 years could easily compound to an additional $300,000 toward your retirement. Then have all the lattes you want.

If your company has a 401(k) plan, beat a path to the door of the HR department and ask how to get started, even with just a small amount. Get used to having a few bucks withheld before you ever see it, and gleefully accept your employer's matching contribution if it offers one.

Avoid fees like the plague. Learn early to be on the alert for additional charges incurred in financial transactions and make every effort to avoid or minimize them. These extra charges may seem insignificant on their own, but the cumulative impact can melt a hole in your pocket. A recent survey reported in USA Today indicates that Millenials in particular fall victim to usurious services like payday lending, fee-based prepaid cards, and pawn shops in exchange for convenience or because they lack understanding of the outsized expenses. Learn to ask questions and comprehend all the costs, and seek out lower-fee alternatives like community banks or credit unions.

A 25-year-old female has a remaining life expectancy of 60 more years, but should expect to accrue less generous government retirement benefits than current recipients. Establishing lifelong habits of thrift and investment today can help insure the financial resources to enjoy those extra years in style.

Christopher A. Hopkins CFA, is a vice president at Barnett & Co. Submit questions to his attention by writing to Business Editor Dave Flessner, Chattanooga Times Free Press, P.O. Box 1447, Chattanooga, TN 37401-1447, or by emailing him at