Mom and dad’s basement is looking more appealing these days. As many recent and soon-to-be college graduates are still searching for jobs, it seems almost impossible to afford living on your own. Or, for those fortunate enough to have found employment, the fear of losing it is spurring fiscal conservatism.

Generation-Y is more aware of financial decisions than ever before. Dr. Gary Waters, the associate dean of the College of Business at Auburn University, stresses the importance of establishing a budget and building savings through investment.

“My advice to anyone that’s about to graduate from college is to, as soon as they get settled into their new position, their new location, I would strongly encourage them, number one to establish a financial budget,” Dr. Waters said. “It’s one of those things where you really don’t realize how much you’re allocating to each activity and to each expense until you put it down on paper.”

Seeing where the majority of your money is going can help cut discretionary spending to establish savings.

“If possible, or as early as possible, I would try to get some type of savings built into that budget,” Dr. Waters said.
With the instability of the current economic climate, fear of losing your job is legitimate. Savings become important so if you lose your job or they cut benefits like health care, you have a nest egg to prevent you from losing your home.

Some of the easiest ways to save is to cut out “trimmables,” also known as your discretionary spending. For one, eat out less. Cook at home or take your lunch to work. This includes making your own coffee, which can save you around $1,000 annually if you’re an everyday coffee drinker. If you haven’t already found a place to live, try finding somewhere close to work to spend less money on gas. Or find a place near public transportation. Look for apartment complexes with their own fitness center to avoid additional gym membership costs.

So, you’ve established a budget and are starting to save. Where should that money go? Experts say invest. There are so many ways to invest. Dr. Waters recommends the unthinkable: Put your money in the stock market.

“I would put the savings into the stock market which might be a little bit unusual, but if you go back and look at the last 50 years there have been very few investments that have been comparable to the stock market,” he said.

According to CNNMoney.com, the S & P 500 returned an average annual 9.6 percent gain from 1926 to 2008. Don’t invest in just any ole stock.

“It’s going to be very important to have diversified investments,” Dr. Waters said. “The easiest way to do this is to invest in mutual funds.”


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