50 – 30 – 20 Commencement Advice


The graduation commencement speeches have started.

Four years ago I made a mock speech to High School Graduates. All the celebrity headliners were giving their commencement speeches at leading universities. I thought the high school kids needed more “going forth” guidance than college students.
I still do.

I’m thinking it’s time to do it again. Different words this time. I’ll let you see the suggestions from four years ago when I’m finished with this year’s guidelines.

This year I think the high school graduates need money help.

Financial guidance.
How to live monetarily in this cruel world.
I’m not sure who’s giving the high schoolers advice on how to spend and save money, but it’s not working.

Credit card debt is creeping up again, all most as bad as it was before the last bubble burst. No matter what level of income, especially for younger folks starting a new career, this is what I believe they should be taught before they ever take that first job.

The 50-30-20 rule is easy to understand and it works.

Those numbers are all percentages of your income. Your take home pay after taxes.

50% of what you earn should cover all your basic living expenses.
“Absolute necessities.”
Housing – Food – Utilities – Transportation

20% of what you earn should go to Financial Obligations. Debt and Savings…period.
Pay off student loans, credit cards and SAVE, SAVE, SAVE. Not only will there be many rainy days in life where you will need a cushion, but you will NOT be able to live on Social Security when retirement comes.
(A report this week states that half of all workers have saved less than $10,000. Worse yet, 25% of all workers have saved less than $1000)

30% of what you bring home can be used for things called “personal choices.”
For me, those monthly choices would be gym membership, good satellite TV and internet package, a fine restaurant, a nice vacation.
Only YOU can decide how to spend that 30%.

As you get into your 20s, it’s a period of trial and error, mostly error. Just remember you don’t need a large net income to set up the 50-30-20 system. But, it will grow with you as your income grows and you won’t find yourself upside down with boat, RV, Jet Ski and furniture payments that have you strapped.

Here are my final thoughts about the money you are about to start earning.
Money happiness

For those who would like my “prophetic” thought from four years ago…check it out with the post titled: Click on title.

My Valedictorian Speech to the Class of 2012

About bakoheat

Writer/Musician
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