Financial tips for grads

From my post as a local bank lender, I have reviewed many personal financial situations. Credit reports, financial statements, tax returns, paycheck stubs. The good, the bad, the “What were you thinking?”

Since it’s the time of year for me to give unsolicited advice to people who aren’t listening, here’s a message on money.

Be very careful who you marry. This may seem like an odd way to start a financial advice column, but nothing destroys wealth like divorce.

A corollary: Nothing will get you through financial setbacks like a solid marriage. Make patience a top virtue of your marital choice and you’ll be well on your way.

Live below your means. Overextension is a scourge of our time. Keep margin in your schedule and in your finances. Don’t spend every dollar you make. Save some, invest some, give some.

When you give, give generously. The more it hurts, the more it helps – most of all you. Generous people prosper. It’s a spiritual law like “You reap what you sow.”

Be a producer first and a consumer second, not the other way around. It’s the only sustainable way to live. Some of your elders in Washington are still trying to figure this one out.

Keep it simple. Only do things financially that you understand. At some point, some relative will invite you to invest in something that will sound too good to be true. It will be.

Underestimate the value of things, especially if you own them. Something is worth only what someone else is willing to pay for it right then. Your Xbox is worth $50, not $300.

Don’t talk about how much or how little you paid for things. That’s annoying.

The value of what you own (your assets) minus what you owe (your liabilities) equals your net worth. The more positive the number, the better.

But it’s not necessarily your assets that give you financial stability; it’s the recurring cash flow generated by the assets. Many assets don’t generate any cash flow.

Pay your bills on time – no – early.

If you get in a bind, communicate with your creditors. For lenders, the worst news is not bad news; it’s no news. The bank doesn’t want your Honda Civic back. Explain the situation and ask for a mutually acceptable plan of action. Then do what you say you’re going to do.

Keep your image consciousness in check. We all have some. It drives what we drive. But if your car payment equals your rent payment, it’s not in check.

Never have an auto loan over $10,000. Just don’t.

Don’t take out more student loans than the average starting annual salary of someone in your chosen profession. In other words, don’t go to SMU for a social work degree. (See for more thoughts on student loans.)

Plan and track every dollar you spend. You’ll never grasp your total financial picture unless you grasp the picture’s tiniest components. iPad app or spiral notebook, the method matters not. The habit does, especially in an era of easily forgettable electronic payments.

Sometimes you’ll take a job because you’re passionate about it. Other times you’ll just need the experience. Both reasons are valid.

Beware a high salary that locks you into a situation that doesn’t inspire you. Expenses will quickly rise to fill income and will be hard to undo. Many miserable people are paid quite well.

Finally and most importantly, store up for yourselves treasures in a higher economy, one not subject to recession, layoffs, fraud or theft.

Kevin Thompson is vice president of Texas Heritage Bank and a weekly opinion columnist for The Boerne Star in the Texas hill country. Follow him at

2 Responses to “Financial tips for grads”

  1. 1 Joel Ford June 8, 2012 at 14:03

    Great article, Kevin. I hope some take your advice to heart.
    Joel Ford

  2. 2 Billy Bob Brigmon June 11, 2012 at 14:40

    Another great one, Kevin! I especially like, “Be a producer first and a consumer second!”

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