Money-smart advice for the recent college grad

For recent college graduates, a recent Economic Policy Institute study paints a good-news, bad-news picture of your job prospects. The good news: you’re more likely to land a job than your peers in recent graduating classes. The bad news: you’re probably going to be underemployed and underpaid.

Seem grim? It’s not. There’s something to be said for gainful employment. Besides gaining valuable work experience, you’re also bringing home a paycheck. That’s huge, because while many people say a penny saved is a penny earned, the truth of the matter is your pennies won’t amount to much unless you earn and spend them wisely.

Be a wealth engine

We all have to start somewhere, and unless you’re the boss’s kid, it’s usually not very close to the corner office. The important thing to remember is that you have to continually jump at opportunities and invest in your success. As financial analyst Paul Clitheroe says, “Your career is the engine of your wealth.”

Investing in yourself may seem daunting, especially now that you have student loans to repay. However, you don’t have to spend big—or anything at all—to invest in your future.

Here are four things you can start doing today that will pay big dividends tomorrow:

1. Keep learning. The reason we go to college in the first place is to learn a set of marketable skills. Being a college graduate doesn’t make that any less important. In fact, for most of us, our earning potential directly corresponds with our skills and talents.

So close Facebook Messenger app, stop giving so much thought to being witty in 140 words or less and start reading industry publications and money management magazines and books. It’s a great way to get more in depth information from industry experts and insiders.

If your employer offers tuition reimbursement, take advantage of it and enroll in some courses that will help with your professional development. It demonstrates commitment to your career and will boost your resume.

Also look for courses and programs offered by local chambers of commerce, industry associations, libraries and business groups. You’d be surprised by the number of free to low-cost offerings there are that can help you improve everything from developing a budget to landing a better job to leveraging your earnings to build wealth.

2. Be money smart. According to surveys by the National Retail Federation and Hallmark, recent college graduates prefer cash more than any other gift. The question is, what are you going to do with that cash? Here are a couple of ideas.

One, start a savings fund. Nothing can derail your financial future more than having to finance unexpected expenses at a high interest rate.

Two, begin investing. No, it’s not too early. Put the power of compounding interest to work for you by directing a small portion of your weekly earnings into an investment account. Even investing in an online index fund that collects interest is a great lesson in savings and investments.

Also consider scheduling an appointment with a financial advisor. The act of setting goals and discussing basic money management principals—from setting a budget to learning the difference between good/bad debt and maximizing contributions to your retirement plan—is an important exercise.

Most people don’t choose to make poor financial decisions. Rather, they lack the knowledge to make informed ones.

3. Get insurance. Do not underestimate the value of your health and safety. Yes, you’re young. Yes, you think you’re invincible. But guess what? You’re not. Illness and accidents happen, and they can be very costly.

Under the Affordable Care Act you are eligible to be insured as a dependent on your parents’ health insurance plan as long as you are younger than age 26 and are not offered coverage through your employer. In addition, it is important to understand that regardless of your life stage, you should minimize your exposure to financial loss.

Think of it this way. Insurance is giving up a small piece of the whole today in order to preserve it in its entirety for tomorrow.

4. Network. The importance of making connections and building relationships with other professionals cannot be overstated. In fact, most successful business leaders will attribute their own accomplishments to lessons learned from a mentor, and they are eager to pay it forward.

Your local chamber of commerce, industry associations, nonprofit volunteering and even your workplace are all great places to meet such people. It’s important to keep in mind that the goal of networking is to expand your sphere of influence and to do for others what you hope they can do for you—create opportunities for growth.

Step out of your comfort zone

Entrepreneur Robert Arnott says that “what is comfortable is rarely profitable.” As a college graduate with your life ahead of you, take this to heart. You will get from your life what you earn. What you earn will be the direct result of the actions you take and decisions you make, and much like the principal of compounding interest, the younger you start and more disciplined you are, the easier it will be and more likely you are to achieve and even surpass your goals.

Maria Cancel manages the KeyBank Eastchester Branch.