PERSONAL FINANCE: Help your graduate get on solid financial ground | Business

With graduation season drawing to a close, many recent graduates are making their first major decisions about the future — where to live, which job to take and how to spend their non-working hours. Stepping out on their own often comes with another big first — being financially independent.

While this newfound control can be exciting, it can often be overwhelming, especially during these uncertain times. If your son or daughter is fortunate to be in a position to be gainfully employed, help them start off on solid financial ground by making sure they don’t skip these important first steps.

Study your employee benefits. For many recent grads, this is the first time they’ve been offered a 401(k), health insurance or the chance to purchase additional time off. Before enrolling in benefits, graduates need to research and understand their options. Remind them that it’s okay to have questions, such as whether they should consider disability insurance or if a plan with a Health Savings Account (HSA) is the right fit. A good place to find information is through the human resources department or benefits provider. They will likely have the resources and staff available to help.

If graduates have questions specific about their financial situation, they could consider meeting with a financial professional. A financial advisor can provide objective advice and answers to more technical questions. Ultimately, graduates should have enough information and guidance to feel confident making their benefits selections.

Have a plan for your debt and credit. Graduates today have more student loan debt than previous generations, which means balancing their post-grad lifestyle with student loan payments should be a top priority. They should consider the value of consistently paying above the minimum amount due. Establishing this responsible habit can help them avoid costly interest rate charges and late fees.

The same thinking should be applied to credit. It’s important for young adults to establish a good credit history, so opening a credit card can be a wise financial move. However, graduates should stick to one or two credit cards to avoid overextending their credit.

Develop a budget. Remind your new grad that without careful planning it’s easy for their hard-earned paychecks to trickle away. Creating a budget can help young adults feel in control and accountable for their cash flow. Budgeting, while often a mundane task, allows graduates to ensure their money is being spent, or saved, on the items that are most important to them.

This is exciting time for graduates, but it’s also an important time to get the right financial discipline in place. Given the heightened environment we’re in today, all the more reason to focus on getting off on the right foot.

Bronwyn L. Martin is a Financial Advisor Chartered Financial Consultant with Martin’s Financial Consulting Group, a financial advisory practice of Ameriprise Financial Services Inc. in Kennett Square and Havre de Grace, Md. She specializes in fee-based financial planning and asset management strategies and has been in practice for 18 years. To contact her visit www.ameripriseadvisors.com/bronwyn.x.martin