Dave Ramsey. Most likely, that name rings a bell. Author, radio host, television personality, speaker, and most importantly, financial expert. Ramsey has gained national fame for his financial system that emphasizes living debt-free.
Apparently financial wisdom runs in the family. Ramsey’s daughter, Rachel Cruze, has joined the family business with a passion to change the way the upcoming generation views money.
Cruze now travels the country to speak to young people about wise money management. When asked what she considers the most important financial advise for a new college graduate, Cruze gave several invaluable tips.
Cruze said creating a $1000 emergency fund as quickly as possible after graduation is imperative.
“This emergency fund should be your first goal and should be established within weeks if possible,” Cruze says.
Next, she recommends starting a zero base budget (see side bar) as soon as you get your first paycheck. She explains that after calculating all monthly expenses and savings, every dollar earned should have a place within your budget, which allows you to be intentional with your money.
“We like to say that budgeting your money is simply telling your money where to go instead of wondering where it went,” Cruze says.
After establishing a budget, Cruze says to concentrate on getting out of debt. She highly recommends paying off small debts first regardless of interest rates, and then moving on to larger debts.
“Paying off small debts first gives us motivation because we see progress. Its like losing weight, when you lose a few pounds, it motivates you to keep going,” Cruze says. “Do everything you can to squeeze money and pay off small debts, then move on to larger ones, like student loans.”
When thinking about saving long-term, Cruze advises to pay off all debts first before switching focus.
“When your ready, start a traditional savings account or a money market account for things you plan to buy within the next five years, like a new car or a vacation,” Cruze says. “There is less risk involved.”
For long-term savings, Cruze recommends putting your money in a 401k or a Wroth IRA (tax-free) account.
Photo provided by The Lampo Group