Strategies for 2007 college grads

Strategies for 2007 college grads
In just a few weeks, thousands of college students will leave campuses all across the country to embark on their careers, according to a survey by the National Association of Colleges and Employers (NACE).

The outlook for 2007 graduates is good. The survey indicates employers plan to hire about 17 percent more graduates for the class of 2007 than they did from the class of 2006, making this the strongest job market since 2000-2001. The college class of 2007 can also expect to make more money – $40,166 median salary – compared to their counterparts with two-year associate's degrees ($30,937 median salary) or those with high school diplomas ($21,079 medina salary).

But even with a starting salary that looks pretty good, some college grads will struggle financially. Deductions for benefits and taxes take a bite out of the paycheck, and paying for rent, car payments and insurance, plus student loans, will take careful planning. Sooner, rather than later, is the right time to develop a financial strategy that can help a recent grad meet his or her financial goals.


Kiplinger.com says a new grad's ideal budget would involve no more than 30 percent of take-home pay going for rent. Other housing expenses – including renter's insurance, should take about 10 percent.

Transportation – including a car payment – should be about 10 percent, and car insurance and other expenses about 5 percent. With 10 percent going to pay down student loans and 10 percent to savings, 15 percent for food (both eating in and eating out), that leaves 10 percent for clothing and entertainment.

Insurance is an important consideration for grads, and auto and homeowners or renter's insurance are essentials. Although the new grad's home or apartment may be furnished with low-cost pieces, just the expense of replacing that new business wardrobe could be way more than a starting salary could afford.

Life insurance is another important consideration. Although many employers provide some life insurance as a benefit of employment, that insurance goes away when an employee leaves the company. And in today's marketplace, employees tend to change jobs often. With that in mind, it's a good idea to think about some permanent life insurance, especially if there is a spouse or child to consider. And it's important to know that buying life insurance at a younger age usually means a lower premium compared to buying it 10 or 20 years later.

Many grads have significant student loans. Consolidating those loans may be advantageous, says studentloanconsolidator.com. Consolidating can stretch the repayment period to longer than the standard 10 years and reduce your incremental payments.

That means there's more cash available for other

expenses, and the interest rate will be locked in for the duration of the loan. For more information on consolidating student loans, go to studentloanconsolidator.com.

For new grads, there's a whole new world of opportunity waiting, and a local Farm Bureau agent can help

you find the path you want to travel. For more information, call your local Farm Bureau office or log on to fbfs.com to locate an agent near you. Through an exclusive multi-state agent force, the companies affiliated with the Farm Bureau Financial Services brand underwrite, market and distribute a broad range of financial services products, including life insurance, investments, annuities, property-casualty insurance products and services, and more to individuals and small businesses within a marketing territory that includes 15 states.

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