By Douglas K. Freeman, J.D., LL.M — Executive Vice President, Director of Consulting
Annie Jensen

Congratulations. Earning your undergraduate degree may be a stepping stone or the final hurdle, but either way it is a worthy accomplishment. After the excitement wears off, the daunting question emerges: Now what? A college education provides you with a wealth of knowledge, but few institutions prepare you for the critical life decisions you’re about to make – what career to chose, where to live, how to take charge of your own financial life. You’re now an independent adult. Have a nice day!

The most important first step is to ask the right questions. We’ve framed a few to get you thinking. You’ll have others. Your answers will likely differ from your friends and even siblings and will change depending on the circumstances of your life at this moment. But this process should help clarify the issues and hopefully make your choices easier. It is only after honestly answering these and similar questions that you can begin to organize a concrete plan and set realistic goals. Every choice has a consequence, and it is important to weigh the pros and cons of each. Keep in mind, there is no one all-encompassing “right” answer to any of these questions. No grades will be given. It’s just part of a life long process of thinking through this next stage in life.

Off to Work or on to Graduate School?

The current economic crisis has caused an influx of jobless college graduates to consider going back to school. Before you rush into a decision weigh out your options. What should be influencing you when making this decision? Economics? Uncertainty? Opportunity? School fatigue? Parental pressure? A quest for some life experience? Attending graduate school is a huge investment in time and money. These questions will help you decide if the investment makes the most sense for you.

Get a Job or Find a Career? 
Career experts calculate that the average person will change careers four to five times over his or her lifetime. Long term – finding a career is the challenge. This requires assessing your talents, understanding what excites you, and identifying where the emotional, financial, and intellectual opportunities lie. Finding a job can either focus on making a buck or starting on the road of exploring a career. The former can lead to wandering for years. The latter may be slower but the end goal is always in sight and a step closer. It tends to start broad and wide and then to narrow down as the questions get answered through experience.

There are many factors that come into play when considering a career. What factors are important to your happiness and success? Is it about the actual job description or more about the job environment? What type of work environment will you be the most successful in? What type of people do you want to work with? What morals are important to you and do the companies exemplify these morals? Is the company involved in the community? The company is choosing you but you are also choosing the company.

You must be honest with yourself in order to be honest with your employer. This is a relationship, and like every good relationship it must be built on trust. Having a true awareness and understanding of your necessities, desires, strengths, and weaknesses is the best way to avoid disappointment.

Spend Now or Save for Later?

Why should you care about saving money at age 23? There is a huge advantage to starting to save at an earlier age.

This table displays the savings of Chelsea and Katie. They both saved $24,000 over the years. Chelsea began saving ($50 per month) at age 25, while Katie began saving ($100 per month) at age 45. Although they both put in the same total amount, by the time they are both 65, Chelsea has almost twice as much money to retire with as Katie. (I need to cite Saving can seem impossible at first. But it is important to get started early, even if it is just a little bit each month.

Your company may provide a 401k. If you are unsure or have any questions about your 401k the human resources department of your company should be very helpful. Use your resources. Speak to your personal banker at First Foundation Bank to educate yourself regarding your investment options. Ask for help setting yourself up with a realistic budget. Do not put this off, because it will catch up to you.

Saving is much easier if you give yourself a budget. Young adults do not realize the importance of managing credit and living within a budget. What aspects of your life will help you stay on track and what will make you go astray? Bad credit will not only affect your ability to purchase a car or home one day, but also may affect your chances of getting a job.

Live at Home or Live Alone?

This is a strictly personal decision, but there are questions which must be asked before coming to a decision. Can you afford to live alone? Are your parents pressuring you? What will be the challenges to living at home, and how long will you stay? What responsibilities do you have? What expectations do you have about your family members? Is this the easy way, the only way, or the best way at this point in your life? If you do decide to live with Mom and Dad, there are some specific topics that should be discussed in order to ensure that all parties are on the same page.

At First Foundation, we are concerned not just with the tax and economic consequences of wealth planning, but with the impact of that planning on the lives of those for whom the wealth was intended to benefit.

First Foundation, a comprehensive wealth management firm, provides investment management, wealth planning, consulting, trust and banking services.