As the final notes of Elgar’s “Pomp and Circumstance” hustle you out of the auditorium from graduation and thrust you into the real world, a sense of freedom and a wide open world welcome you. For once, there is nobody telling you how and when you should spend your money (except maybe your student loan creditors).

As you welcome and adjust to the new changes and opportunities in your life, you may find yourself getting excited to start a new job and earn money to help you live the life you’ve always imagined. Every financial choice you make from this day forward can be one that either helps you accomplish your goals or sets you back if you don’t protect your finances. By recognizing how your choices can affect your overall financial picture for the rest of your life, you can learn to make smart moves in investing and managing your money.

Take Charge of Your Situation and Save

By knowing what’s coming in and going out, you can better allocate your funds for spending, saving and investing, so create a budget and get your situation on paper. Even if it seems small, set an amount immediately that you will save each month and consider it a regular monthly expense, so when the money comes in, funnel that amount directly to savings. If you wait until you’ve paid all other bills to decide an amount to save, the likelihood of spending left over money on something fun rather than saving it is probably high.

Do you want to be a “$30K millionaire” now or work toward being an actual millionaire in the future?

The technology available from banks can be a huge help. You can tell deposits exactly which account to funnel to, and can even take set amounts from deposits and place them into your savings and checking account immediately. If you’re lucky enough to still get checks from the grandparents on your birthday, you could snap a photo of your check on your phone and send it right into your savings account.

Invest for Yourself

As a young graduate, you have one thing that may be the envy of every other investor: time. You can’t buy or earn time, so make it count for you while you have it in abundance. Don’t let potential earnings slip away by not investing early. The day you are eligible for your company-sponsored 401k plan, take advantage by signing up. It might seem daunting trying to figure out which funds to buy, what a fiduciary is, or why an IRA and Roth IRA are different.

That’s where the experts can help.

From your personal investment accounts to your retirement plan with your company, it helps to have someone who does this for a living watch over your investments. While many investment managers set high minimums that recent grads don’t typically meet, there are advisors who have structured their business model to help you get started investing.

Assuming an 8 percent return, if you invested $2,000 annually beginning at age 18 vs. age 28, by the time you reach 65 you would have $905,800 or $406,141 respectively. That’s about a $500,000 choice. What a difference time can make. Watching your progress will help keep you motivated and excited, so save as early and as often as possible and always pay yourself first.

Establish your saving and investing habits early so it becomes a natural and systematic process in your life. Treat your savings and investments as exactly what they are–an investment in your future. Your future self will thank you.

Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this content, will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for you or your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter (article) serves as the receipt of, or as a substitute for, personalized investment advice from Allos Investment Advisors, LLC.

The content of this letter does not constitute a tax or legal opinion. Always consult with a competent professional service provider for advice on tax or legal matters specific to your situation. To the extent that a reader has any questions regarding the applicability of any specific issue discussed in this content, he/she is encouraged to consult with the professional advisor of his/her choosing.

Published for the blog on February 18, 2021 by Allos Investment Advisors, LLC.