What grads need to know about finances

• You should begin saving for retirement right away. At a minimum, make sure you attain any matching contributions that your firm may offer.

• Use part of salary increases to increase the percentage of your salary saved. Windfalls such as an inheritance or IRS refunds should be used in the same manner. Don't use all of your take-home pay to finance your lifestyle--you will never be able to begin serious saving for retirement.


• While you should be cautious about taking on any kind of debt, there is a difference between good debt and bad debt. Debt used to finance "things"--credit card purchases, cars, any depreciating asset--is "bad" debt and should be minimized. Home purchases are assets that will probably increase in value, and debt used to purchase homes is "good" debt, or at least "not as bad as bad debt." Good debt is typically less expensive than bad debt--mortgage interest rates typically are much lower than credit card interest rates, for instance. Mortgage payments also are typically tax deductible, while the interest on credit cards and similar loans are not.

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