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Mind Your B.I.S. - Tips to jumpstart your financial well-being

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Posted: Wednesday, February 12, 2014 4:00 pm | Updated: 1:32 am, Thu Feb 20, 2014.

(BPT) - In the next few months, high school seniors across the country will be anxiously checking mailboxes for college acceptance letters. With two-thirds of recent high school grads enrolling in college as of 2012, according to the Bureau of Labor Statistics, it is the first step on a journey towards personal and financial independence for many Americans. Whether an incoming freshman, soon to be senior or recent grad, it is never too early to get financially fit. The key to success is to make the process fun and manageable.

Easy and enjoyable financial planning is the premise behind TheMintGrad.org, a new website from Northwestern Mutual, intended to encourage 18-24 year olds to embrace the notion of F.L.C. (financial loving care) – or the importance of strong financial habits as an essential component of overall well-being. In addition to a wide spectrum of content on topics ranging from investing to interview tips, the site features columns by well-known financial bloggers and user-friendly interactive tools.

According to experts at TheMintGrad.org, the quickest way to jumpstart a financial fitness program is to mind your B.I.S.:

Budgeting – According to a recent Gallup poll, less than one third of Americans (32 percent) put together a monthly budget. Learning to track income and expenses is essential to staying out of debt, especially for someone with limited means. Successful budgeting is similar to dieting. It is important to be realistic with goals and work towards incremental improvements. And like dieting, “cheating” once or twice will not undermine progress unless it becomes an excuse for abandoning the effort.

Investing – Though investing may not be an immediate priority for recent grads focused on meeting daily living expenses, starting early on a small scale can have significant advantages. Consider the rule of 72 - the number of years needed to double your money at a given interest rate, which is calculated by dividing 72 by the interest rate. For example, money invested at 10 percent will double in 7.2 years. Contributing to an employer’s retirement plan, like a 401(k), as soon as it becomes available is another good opportunity to jumpstart investing. Not only does a contribution decrease taxable income, but some employers also offer to match a portion, which is an added bonus.

Saving – With the average student debt load topping $29,000 for the class of 2012 (CNNMoney), the idea of saving may be easier said than done. However, having a safety net has numerous benefits. More than half (53 percent) of the respondents in Northwestern Mutual’s 2013 Planning and Progress Survey between the ages of 25 and 54 feel that starting to save early is the best financial decision they can make. The sunny side of having a nest egg is added flexibility in professional and lifestyle choices. It can provide the luxury to pursue hobbies and passions. The trick is to set an achievable goal, even if it’s just a few dollars every month be disciplined and consistent in sticking to it. For example, $40 each month (or a few lattes less per week) can become $480 in savings by year end.

While the topic of financial planning is intimidating at any age, it truly is a case of an ounce of prevention is worth a pound of cure. Minding your B.I.S. is the foundation for a sound financial strategy that can adapt as income grows and goals evolve.

For more information, interactive tools, and other resources to get started, visit TheMintGrad.org.

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