KNOXVILLE, Tenn. — The University of Tennessee is sharing some advice for new college graduates trying to start off on the best financial footing.
Laura Cole, the Director of the Masters Investment Learning Center at UT has five tips on how to measure your wealth.
Number one, knowing your net worth and having an idea of how much you owe versus your own is key to understanding where you stand.
Second, create a budget. Start by tracking where your money comes from and where it goes then adjust.
Many experts suggest a 50-30-20 budget.
50% goes towards necessities like rent, loan payments, and groceries. 30% is to splurge on entertainment and 20% should go towards saving and paying down debt.
Third, build an emergency fund. Cole said don't rely on the "bank of mom and dad" to help with emergencies.
She said to set aside a little each month until you have enough to cover all your personal expenses for six months.
Then, establish a retirement plan early.
If your employer offers a 401(k) you can have money transferred from your paycheck right to your retirement account.
Some employers offer contribution matches as well.
Cole said the goal should be to save 15% of your pretax income for retirement.
Finally, use credit and credit cards wisely.
To keep your credit score healthy she said you should use less than 30% of your credit limit in any given month and pay them off monthly.