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May 102013

more-money-pleaseLooking to impart some financial wisdom on the soon-to-be college grads in your life? We turned to Scott Gamm, author of the brand new book, More Money, Please: The Financial Secrets You Never Learned in School (Penguin/Plume, April 2013), to help you do just that.

As a 20-something himself, Gamm recognizes the fact that making financial mistakes in one’s youth can end up being costly for many years to come, especially for those entering such a tough economic climate and tight job market. Here are his top tips for starting out on the right financial foot.

Put a post-graduation retirement plan in place. Yes, retirement! That’s probably the last thing on a new grad’s mind, especially if he or she is trying to start a career, but savings is important from the get-go, says Gamm. “First, get $1,000 of liquid cash in an emergency savings fund as soon as possible,” he says. Ideally, you’ll want to build on that until you have a few month’s worth of expenses socked away, but that’s not realistic right after graduation. Once an emergency fund is in place, start directing money into a Roth IRA retirement account, as well as any employer-sponsored retirement savings programs made available to you. “You’ll benefit from the compounding interest because you won’t need this money until 40-50 years from now,” he says.

Earn some credit. Simply put, banks won’t even talk to you if you don’t have a high FICO score, says Gamm. If you plan to apply for a mortgage or even a car loan someday, you’re going to need to prove yourself to be a responsible borrower. “To build credit, open up one credit card (that has no annual fee) and use this card for small purchases under $100 per month,” he says. The goal should be to pay off the card in full each month.

Survive student loan payback. For Federal loans, you will automatically be enrolled in the “standard repayment plan,” which aims to have your loans paid off in 10 years. “If this monthly payment is too high, contact your loan servicer, and ask to be switched to the ‘extended repayment plan,’ which is a longer, 25-year plan that has a lower monthly payment,” says Gamm. Ideally, though, once you’re bringing in more income, you’ll want to work toward paying extra toward your loan so that you cut down some of the interest that gets tacked on year after year.

Take the boring out of budgeting. Budgeting is something that moms and dads do, but smart grads need to count it among the “grown up” things they need to start doing. “You have to know where your money is going each month. You’d be surprised at how much garbage you spend money on,” says Gamm. To create a budget, you need to keep track of all of your expenses (tedious, we know!), but lucky for you, technology can ease the pain a bit. Gamm’s pick: The ABUKAI app, which allows you to take a picture of your receipt after making a purchase, so that it gets automatically added to your tracked expenses. A free version offers limited features; a traditional, single-user account is $99/year.

Sharing these strategies with the college students in your life will help them earn an A+ in money management. For extra credit, consider making a copy of Gamm’s savvy guide part of their graduation gift.

Graduation photo by cooldesign,

Dawn Papandrea

Dawn Papandrea is a freelance writer specializing in personal finance, parenting, and women's lifestyle topics. She's been a journalist for nearly 15 years, doing everything from editing to writing to blogging to social media management. Her work has appeared in, Family Circle,,, Parents,, The Huffington Post, and other national publications. She lives in Staten Island, NY with her husband and two sons. You can read her personal blog at, or follow her on Twitter: @dawnpapandrea.

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