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10 Investing Tips for Recent Grads--Getting a J-O-B is Just the Beginning

Stepping out of the college vacuum and into the trials and tribulations of an ever-fluctuating financial world can be daunting. This is especially true if your expensive education did not furnish you with the proper tools on how to make your hard-earned coin work for you. Getting a job is just the beginning but what to do with that paycheck is a whole other ordeal. Take a gander at these 10 investing tips for recent grads and see if one or more may raise an eyebrow to get you on track as early as possible.

Do a Little Digging

Reading up on investment tips is the best way to start considering your options. Some excellent reads include: "Generation Earn: The Young Professional's Guide to Spending, Investing and Giving Back" by Kimberly Palmer, senior editor of World Report and U.S. News; and "Get a Financial Life: Personal Finance in Your 20's and 30's" by Money Magazine's personal finance commentator Beth Kobliner.

The Gray Way

Get on your company's retirement or 401K plan and contribute what you can. Even twenty-five bucks per week makes a difference, as you will be starting a habit that can only grow as time goes on. Plus, if your company offers a 'full match' they will mirror what you put in which is usually anywhere between 4-6% out of your paycheck to qualify. Currently, anyone under age 50 can contribute up to $17,500 per year. It is tax-deductible and tax-deferred. No available plan in your company? Set up your own at your local bank or through a broker.

Budget It

Once you are used to your weekly paycheck sit down and hash out a budget list of the usual things like rent, bills, food, transportation, etc. and stick to it. If you spend less than you make you should be okay.

Rainy Day

Many financial experts agree that stashing away enough liquid cash that you can ride on for six months to a year can be a veritable lifesaver. Figure out how you can setup a money market, mutual fund or even a measly savings account to amass a fallback if things go south. Same as a retirement fund, a little per week with monthly or yearly increments can surprisingly make a dent.

Health is Wealth

Don't be stupid, get health insurance. The Affordable Care Act allows you to ride on your parent's plan until age 26 (unless your job offers health insurance). Need to buy it? As of January 2014, there will be plenty of choices and price plans.

Defy Debt

Credit cards, student loans or any other payback debt should be targeted like a cancer. Here is another weekly investment that can be won over if you remain steadfast. Debt expert author, Ken Ilgunas claims he paid off $18,000 of his $35,000 student loan in one year.

Timing is Everything

Late investors get late returns. Use your long future road to gather as much as you can. Stick to mutual funds and stocks for a conservative-beginning, investment strategy. If a little play money comes your way then go gamble on a few riskier portfolio entries but keep the bulk of it in solid stock.

Graduation Take

If you are lucky enough to have a small windfall of cash gifts do not go spending crazy. Three quarters or more of it should be wisely invested in any of the above.

401 Faux Pas

It is imperative to leave or rollover your 401k when switching jobs. Cashing out is a very unsound decision as there are fees and penalties attached. Sometimes a financial emergency trumps this but doing everything in your power to avoid it is recommended.

Mental Health

Make sure you do not forget to take mental health time by splurging on something that will make you happy and relaxed. Lounging on a beach, going to a concert, attending a sports camp, a golf outing, a spa weekend, skiing or whatever you choose, this is an investment to blow out the gaskets so you will be a better person (and smarter investor) because of it.

These tips should spark a few ideas that you can implement right away. Keep on top of them and they can work wonders for your future.

Maxime Rieman is a writer for NerdWallet, a financial literacy website that provides consumers with investing tips.


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