From the HR Desk: 10 Money Habits for Recent Grads

Jan 11, 2018
Career, Budgeting, Employment, Retirement
This post came from NGPF's new office manager, Rita Fung, who most recently ran HR at a high growth company in San Francisco. She wanted to share her observations regarding how young people joining the workforce for the first time managed their money (and even started to save for retirement). 
Living in the Bay Area is pretty awesome. It's got a thriving economy, beautiful sites, and endless activities. All this goodness comes at a price: bad traffic, long waits, and especially, expensive housing. This is probably why so many Millennials who have recently entered the workforce are struggling financially.

Part of my job in HR, is to on-board new hires to the company. I like to give folks the personal touch and will offer one-on-one meetings to discuss health care options and retirement plans. I found that when it came to retirement saving, these fresh-ish college grads had varying degrees of knowledge. From some who knew all about investing in Index Funds, to people who had heard of a 401k and were told that they should start one.

Wanting to save for retirement was one thing, affording it was another. Some good money habits that I observed over the years from some of these folks allowed them to build up their emergency savings account and start to contribute to their retirement account:

1) Living at home or with a relative (if it's an option). Sure it's less privacy, but one could easily save $1,200-$1,500 (or more!) per month.
2) Living with roommates. Sharing a bedroom would save even more, but there's less privacy.
3) Living outside of the city. Rents in the city are much higher than outside of the city. Every dollar helps!
4) Taking public transportation to work (if it's a reasonable option). With pre-tax commuting dollars or fully subsidized commutes, that saves a ton of money. Not having to deal with traffic is a huge plus.
5) Unless the company caters lunch daily, packing lunch most days instead of going out. It's easy to spend $10-$15 per day going out to lunch.
6) Cooking dinner most nights instead of eating out. Watch out for convenience cooking (Blue Apron/Gobble/etc), which might save time, but not much more than dining out.
7) Paying off credit card debt ASAP (or better yet, not having any at all)
8) Not buying every new gadget that comes out, or feeling the need to keep up with social media Joneses.
9) Making coffee at home (or at the office). Philz/Peet's is meant to be an occasional treat, not a daily habit.
10) Joining a car sharing program instead of owning a car. 
Overall, with some sensible decisions and willingness to put in some time, I saw lots of young people get off to a great start and grow their "nest egg" while saving for retirement.

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.