Jesus Salas Shares Financial Advice for Recent Grads
InvestorPlace provided advice from Jesus Salas, Associate Professor of Finance, in the article “Money Moves for Recent Grads”.
Salas shares a few rules of thumb as part of an InvestorPlace series that invites US academics to share their thoughts on financial issues new graduates should know.
“First, a graduate’s rent shouldn’t be more than a third of your gross salary. Second, you should contribute as much as you can to an employer-provided 401-K retirement plan. Third, graduates should save at least a 1- 2 months salary in cash Your checking account, “suggests Salas.
He adds that students should pay their credit card bills and pay student debts in full each month.
When asked about student loan debt, Salas encourages students with a student debt greater than $ 10,000 to consider repaying it.
“President Biden can cancel $ 10,000 college debt. So, if I follow my recommendations, it may make sense to pay off some college debt if graduates have more than $ 10,000 in college debt. However, it really depends on the interest rate on that debt, “Salas said. “If the interest rate is below 4% I wouldn’t say that there is an urgent need to repay the principal. The youngest graduate should probably repay the principal if the interest rate is higher than 4%. If the graduate has the cash, paying back the principal (as long as the balance is over $ 10,000) is not a bad idea. “
In addition, Salas shares his recommendations on investing.
The full article can be read on the InvestorPlace website.