These days, many college grads find themselves in a financial hole before they even earn their first paycheck. The average college graduate has more than $20,000 in debt.
Financial planner Jim Shoemaker says there are traps young people fall into that put them into debt in a relatively short time. Shoemaker calls them "Budget Busters."
The first budget buster is credit cards. "Things that eat everybody up," Shoemaker said about credit cards.
The next budget buster is cars. "They want a nice car," Shoemaker said, "to make a presence. To say, 'Hey, this is me.'"
The final budget buster is housing. Shoemaker recommends that graduates remember their friends when they first get out of school. "Go into an apartment. Maybe get a roommate," he said. "Make sure you can afford it."
Next week, we'll show how graduates can make out a budget, and what percentage of their income should go to things like housing, cars, and groceries.