FIND A LOCATION:
Find a Location
FIND A LOCATION
Call the Branch
Access online accounts
By the time graduation rolls around, navigating the college sidewalks has become a breeze. But once you toss your grad cap and take the leap into the “real world,” it’s easy to feel like you’re back at square one, treading in unknown territory.
With a list of uncertainties, it’s easy for new grads to feel overwhelmed. We’re here to help! Our graduating Bell team members, who’ve worked at Bell during their college years, asked their burning financial questions – and our experts shared their knowledge to set your finances up for success.
Q: What tips do you have for budgeting and saving for when student loans kick in?
– Hannah Foss, part-time teller
A: 1. Pay yourself first. In other words, contribute to your employer’s 401(k). If a Roth 401(k) is available, use it! How much? Contribute the amount necessary to earn your employer’s match, if available. Then, set a comfortable starting goal, increasing each year until you reach the max contribution each year ($18,500 in 2018).
2. Use online bill pay. Set your most important payments to be made in sync with your paydays to ensure that the most important things are covered before anything else (i.e. rent, car, insurance, student loans, cell phone bill, etc.).
3. Invest in your Health Savings Account (HSA). Contribute the maximum to an HSA – $1,350 for individuals in 2018. (Your employer may also make a contribution for you.)
4. Build emergency savings. Once you get a feel for your budget as noted above, work toward building emergency reserves in your money market or savings account of 3 to 6 months’ worth of expenses.
Try your best to go through this cycle for a number of months without using credit cards, as that can obscure the view of your true cash flow.
Once you see the impact of retirement savings and monthly non-negotiables after tax, you’ll know what your “discretionary” income is. This is what’s available and flexible for the rest of your wants and needs. It will help you put into perspective what’s really important to you.
– Becky Walen, senior wealth management advisor
Q. What benefits should I be looking for when getting my first full time job?
– Samantha McFarlane, part-time customer service representative
A. Salary is one of the important pieces when looking at a new job, but it’s certainly not the only thing. Retirement and health insurance benefits are equally as important. Saving for retirement can seem silly when you first enter the work force, but starting to save early – no matter the amount – can significantly increase your ability to retire when you want.
Employers that offer health insurance benefits should also be at the top of the list. Employers that help pay for insurance premiums can significantly reduce the amount of your salary that goes to health insurance.
Another important question to ask when starting your career: Is there a clearly defined path for advancement? Millennials are hungry to succeed – and that may be viewed as impatience or ingratitude. If there is a clearly defined path and a correlating timeline for growth within a company, you’ll have additional insight about your potential future in the organization.
Two other qualities companies are adopting for the millennial generation are workplace flexibility and social impact. Ask your prospective employer:
Social impact is growing on the list of importance for millennials. Does the company allow you to take time off to volunteer during work hours? Do they offer paid volunteer time? What does the company do to support the community? Do they donate portions of profits to charity, match personal donations or even buy their product and donate a match to someone in need?
All of these are different ways companies are providing purpose and fulfillment to their employees.
– Matt Bushard, wealth management advisor
Q. What advice do you have for graduates with new 401(k) accounts?
– Jacey Taylor, part-time teller
A. Get started saving now and be in control of your retirement. Time is on your side, and the money you save today has many years to grow and accumulate earnings. The longer you wait to save for retirement, the more you will need to “catch up” later to get to where you need to be.
How much should you save? A good goal is 10 to 15 percent of your gross income (per paycheck). Most 401(k)s allow employees to make pre-tax and/or Roth contributions.
Pre-tax contributions reduce your taxable income, grow tax-deferred in your 401(k) account, and then are subject to tax upon distribution at retirement.
Roth contributions are “after-tax” contributions which grow tax-deferred in your 401(k) account and are tax-free upon distribution at retirement, after age 59 ½ and if you have had the Roth 401(k) account for at least 5 years. Many younger employees, with decades until retirement, may benefit by making Roth contributions.
If you are unsure about how to invest the money in your new 401(k) account, most plans offer “managed” investments, such as “target date” retirement funds. Target date funds manage your money for you based on your time horizon until expected retirement. They contain a mix of investments – usually stocks and bonds – that automatically adjust and rebalance over time to gradually become more conservative the closer you get to your expected retirement date. As with any investment, they are not guaranteed and subject to market fluctuation.
The bottom line? Take advantage of your 401(k) plan now, and be in control of your own retirement later!
– Jeff Melchior, Certified Financial Planner® and relationship manager
Q: Do you recommend a certain student loan payment for new grads not knowing how much they can afford?
A: With student loans, you have a long repayment timeline. Don’t worry about paying extra toward principal when you’re starting out. Make the minimum payments. If you have multiple loans with different providers, you may also consider consolidating loans through the Bank of North Dakota or other providers to potentially reduce your interest rate and simplify your finances.
For more information, please consult your tax advisor.
Not FDIC insured | May lose value | Not financial institution guaranteed | Not a deposit | Not insured by federal government agency
Back to Advice Center