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Wednesday, June 4, 2014 - 12:19pm
(CNNMoney) — Chances are most new grads are not thinking about savings, retirement, or home buying right now. But they should be. A solid financial foundation starts early.
Post-recession, many money milestones have shifted.
"Typically, you had a job and bought your first car, got a car loan. And now, with so much student loan debt, people are putting off buying cars and even moving out of homes," said Susan Bruno of the American Institute of CPA's Financial Literacy Commission.
The number of homeowners under age 35 is at a record low, while the number of households with student loan debt is at a high.
However, the news for grads is not all bad. Janet Bodnar of Kiplinger's Personal Finance said time is on their side.
"One of the most important resources they have right now is time, and that affects lots of different things. So, for example, if they're starting to save for retirement, they've got 40-plus years to go."
The class of 2014 can also learn from some pre-recession mistakes their parents may have made, accumulating consumer debt, and taking on mortgages they couldn't afford, and spending what could be saved.
"A lot of younger people make the mistake of thinking, 'Oh my gosh, I'm living on a budget, I don't have two nickels to rub together, I'm living paycheck-to-paycheck, I don't have money to set aside. Or, they think they need to have more money, that it doesn't matter if I put small amounts aside,'" said Bodnar.
Bruno added that those small amounts can go toward an important short-term goal.
"The first thing to do is build that emergency savings fund, because if you're lucky enough to get a job, you are the low man on the totem pole - you may lose that job. You have to have the means to get from one job to the next."
A new grad may never need that emergency fund. At the very least, it is a solid financial foundation.