Columnist image
Pattie Lovett-Reid

Chief Financial Commentator, CTV


We’ve all heard about the debt levels of recent graduates and the challenges of finding a good paying job. It isn’t an easy environment to launch your financial future, when you start out feeling so far behind the curve.

The CFA Institute wants to help graduates launch the next chapter in their lives with three simple financial principles:

1. Pay yourself first – save proactively

The way to save is not by putting away whatever is left over at the end of the month. It requires determining what money you will need in the future and putting the necessary amount of money away when you earn income. It also means learning to live on what remains.

2. Not all debt is bad but it is never an excuse to consume more

Many new grads start their financial lives by getting caught in the consumer debt trap. By amassing large consumer debt and the expenses to manage that debt, they never get the discretionary income required for savings. Debt is a tool that when used correctly can help individuals buy large purchases or can be used in emergencies or when unexpected expenses arise. It should never be used as an excuse to consume more since you are simply trading your future financial stability for short-term consumption. Savings (and investing) and consumption with cash or debt is mutually exclusive. To save the amounts needed to be financially independent you must keep consumer debt to a minimum.

3. Saving and investing are skills that require training and sound advice

New grads are often saddled with a myriad of new and complex financial decisions that they have never been exposed to before. Like any discipline, learning the skills necessary to become financially astute and secure requires learning the principle and best practices that others have used to achieve their savings an investing goals. It’s also good to learn from the common mistakes people have made when meeting similar challenges. Many people learn from the school of hard knocks but it is often an expensive an unforgiving teacher. Look for those people in your life that can help you train to make good financial decisions and to develop good financial habits.