15 Financial Tips That Retirees Wish They Learned Upon Graduation

Following these pieces of advice can have a big impact on your long-term financial future.

graduates line up for the graduation ceremony
Updated June 6, 2024
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Graduation is an exciting milestone filled with promise and potential. However, navigating the world of money can be daunting for new graduates.

Those who are graduating from school this year can learn from today’s retirees, who are happy to share important financial advice they wish they had received at the start of their careers.

Here are 15 essential tips from retirees that can help young graduates get ahead financially and get a head start on their financial future.

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Boost your credit score

Olivier Le Moal/Adobe Business Credit Score Gauge Concept

A strong credit score can open doors to better loan rates, improved housing opportunities, and enhanced job prospects. Many retirees regret not understanding the importance of building and maintaining good credit from a young age.

Fico — the company that created the Fico credit score — says a “good” credit score begins at 670. So, aim for at least that number, and try to exceed it.

To boost your credit score, make your payments on time, try to get out of debt, and don’t borrow excessive amounts of money.

Avoid debt whenever possible

Shisu_ka/Adobe stressed about credit card debt

As millions of today’s retirees know, debt can quickly kill your dreams of building wealth. While some debt can be necessary in life, try to avoid it as much as possible.

Use credit responsibly and aim to pay off balances in full each month to avoid costly interest charges.

Understand the power of compound interest

mojo_cp/Adobe woman calculating monthly expenses

The magic of compound interest can significantly grow your wealth over time. Many retirees wish they had fully grasped this concept and started investing earlier in their lives.

Even modest early investments can lead to significant wealth if you have many years ahead of you.

So, do your best to save and invest consistently, even if the amounts are small. The sooner you start, the faster your money can begin growing for you.

Resolve $10,000 or more of your debt

Credit card debt is suffocating. It constantly weighs on your mind and controls every choice you make. You can end up emotionally and even physically drained from it. And even though you make regular payments, it feels like you can never make any progress because of the interest.

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Build an emergency fund

Deemerwha studio/Adobe hand of young woman putting coins in a glass jar

Financial emergencies can strike at any time, so having a financial safety net is crucial. Many retirees have learned this lesson the hard way.

Perhaps they put off saving for a rainy day and suddenly had to use a high-interest credit card to pay for an expensive medical procedure. Or, maybe they were forced into debt so they could cover the cost of an unexpected home repair.

Try to save between three and six months of living expenses — or even more — so you will be prepared to absorb life’s financial shocks should disaster strike.

Create a savings plan

evgeniia_1010/Adobe accountant working on finances

A structured savings plan will motivate you to allocate money toward various financial goals. Many of today’s retirees reflect with remorse over how a clear savings strategy could have helped them save cash more effectively.

We all benefit from having a roadmap to guide our financial decisions. Decide on your financial priorities and systematically set aside money each month toward those goals.

Craft a budget

Delmaine Donson/peopleimages.com/Adobe ebanking couple working on laptop looking happy

Understanding where your money goes each month is the foundation of financial stability. Retirees often wish they had learned to budget better earlier in life.

When crafting a budget, start by tracking your income and expenses. Then, create a plan that allows you to both live within your means and save for the future.

Keep some ‘fun money’ around

djile/Adobe young woman and man using smartphone by the river

Many workaholic retirees have learned a painful truth: All work and no play can lead to burnout.

Try to balance financial responsibility with personal enjoyment. Keep saving, but don’t forget to set aside a portion of your income for hobbies, dining out, travel, or other forms of fun.

Consider creating ‘sinking funds’

Monkey Business/Adobe repairing burst water pipe

The purpose of an emergency fund is to save for life’s unexpected — and often unwelcome — surprises. By contrast, a “sinking fund” helps you save intentionally for future goals or expenses.

You might use a sinking fund to put away cash for vacations, home repairs, or holiday gifts. As retirees know, contributing small amounts regularly to such a fund can help you prepare for these costs without disrupting your main budget.

Start saving for retirement as soon as possible

Cozine/Adobe hand saving in retirement jar

Many people retire with less money than they wish they had. They have learned too late how much they would have benefited from beginning to save for retirement as early as possible.

So, start saving as soon as you can for your golden years. Take advantage of employer-sponsored retirement plans so you can benefit from compound growth over time.

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This rare checking account has other great perks too, like access to your paycheck up to 2 days early with Early Pay, no minimum deposit or monthly balance requirements, over 60K fee-free ATMs, and the ability to add cash to your account at Walmart stores nationwide.

Don’t leave money on the table — it only takes minutes to apply and it won’t impact your credit score.

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Understand your spending

peopleimages.com/Adobe budget planning with laptop

Smart spending can significantly boost your financial health. Retirees often regret not paying closer attention to their spending habits.

Regularly review your expenses to identify areas where you can cut back. Then, take the money you save and earmark it for future goals.

Pay back your student loans in a timely fashion

mnirat/Adobe graduate holding piggy bank

Student loan debt can be a heavy burden if not managed properly. Retirees emphasize the importance of paying off student loans promptly. Doing so helps you avoid excessive interest costs and overall financial strain.

Consider strategies such as making extra payments so you can get rid of this debt faster.

Don’t underestimate your value in the job market

Drobot Dean/Adobe asian woman giving resume to managers

Negotiating salary and benefits before accepting a job can lead to substantial long-term financial gains. Retirees often wish they had been more assertive in recognizing and negotiating their worth.

Research the standards for your industry and confidently advocate for fair compensation throughout your career.

Learn how to cut medical costs

nenetus/Adobe doctor prescribing medication

Retirees advise learning the ins and outs of health insurance, including premiums, deductibles, and coverage options. Many seniors would have benefited from making better-informed choices about their health care coverage.

Another way to save is to contribute to a health savings account if you are eligible to do so.

Start a side hustle

rh2010/Adobe vlog about cosmetics

Additional income streams can significantly boost your financial stability. Retirees frequently wish they had explored side hustles to supplement their primary income during their working lives.

Whether it's freelancing, building a small business, or trying your hand at gig economy work, creating sources of extra income can help you reach financial goals faster.

Live on two-thirds of your income, save the rest

A. Frank/peopleimages.com/Adobe couple reading bills using laptop

Living below your means and saving a substantial portion of your income can lead to financial security. You might even save enough to retire early.

One good strategy is to try to live on two-thirds of your income and save the rest. As today’s retirees know, saving a little year after year can result in growing a large nest egg over time.

With the benefit of hindsight, many retirees now understand how much peace of mind they would have gained by having a significant savings buffer throughout their working lives.

Bottom line

mnirat/Adobe graduates throwing graduation hats up in the sky

Are you taking the necessary steps today to secure a financially stable and prosperous future?

Planning and managing your finances from an early age can make a significant difference in your ability to build wealth in the long run. So, tap into the wisdom of today’s retirees and apply these tips to your own financial journey.

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Author Details

Adam Palasciano

Adam Palasciano is a personal finance-obsessed and money-savvy individual who loves to hash out content on all things saving money. He specializes in writing millennial-friendly personal finance content, covering topics ranging from trending financial news, debt, credit cards, cryptocurrency, and more.