Starting a Career

There's more to smart career planning than just landing the job and collecting a paycheck. Smart budgeting and staying on top of your debt ratio will keep your finances balanced and on track while you're busy scaling the ladder.  Your career is a marathon, not a sprint, so think of financial planning as a training regimen—and be vigilant. 

  Rules of  

Emergency Funds

  • 3 to 6 months of living expenses should be set aside in savings.

Save at least 10% of monthly income (15% ideal)

  • For those that can't do 10%, start small (5%) and build up to 10% with 1% increments. 

  • Set specific goals to save X% by a certain date, and then set a new target after goal is reached.

Debt Ratios 

  • Consumer debt payments should be 20% or less monthly net income.

  • Monthly housing cost should be no more than 28% of monthly gross income.

  • Total monthly payments on all debts should not exceeded 36% of monthly gross income.

  • Student debt repayment should generally not exceed 15% of monthly gross income.

  Support from            your Parents  

  • Independent financial survival after college is a harsher reality compared to those who graduated during the 60s, 70s, 80s and even 90s. It's ok to get temporary help.

  • Parents and kids should keep lines of communication open and set realistic expectations with each other.

  • A plan to gradually wean down (and eventually be off) of receiving financial help to be outlined.

  Create Separate        Bank Accounts  

Divide up your savings into categories specific to additional goals like saving for a down payment on a house, buying a car, or other large purchases.

  Own It!
  (No more rent)  

  • Make the transition from leasing property to buying property.

  • Use financial rules of thumb to determine when timing is right and the purchase is economically feasible.

  • Consult with experts - mortgage officer, banker, financial planner, or other trusted adviso


Participants should strive to contribute at least up to the company match.

  • Taxable income is reduced with pre-tax contributions

  • Time value of money - compound interest works better the earlier money is saved

  • 100% match is an immediate 100% return on your contribution

    • To put into perspective the power of a company match, it takes 12 years at a 6% average growth rate for an investor to realize a 100% cumulative return

  Private Student        Debt  

Prioritize applying extra payments to private loans, as they generally carry higher interest rates than federal loans.

Review terms of promissory note:

  • Verify loan provisions like deferment, forbearance, and consequence of late and missed payments.

  • Review extending the repayment terms when income and expenses are tight.

  • Understand what happens to the loan upon death, disability, and/ or job loss.

Refinancing loan to a lower interest rate usually more advantageous than refinancing federal to private.

Look for employee benefits that offer student loan repayment assistance as a company benefit.

  Federal Student      Debt  

Income Driven Repayment (IDR) plans are highly advisable for those with entry level incomes or high debt ratios.

  • IDR plans should generally be used when the debt owed is greater than the borrowers annual gross income.

10-Year repayment saves the most interest.

  • Often requires the highest payments

  • Make sure payments are affordable

Public employees are able to pursue Public Service Loan Forgiveness (PSLF).

  • Any remaining loan balance is forgiven after 120 qualified, on-time, income-driven payments.

Review refinancing as an option if there are no intentions of working in the public sector.

  • Proceed with caution - saves interest, but often less flexible terms provided by the lender

  • Often require a co-signer to qualify

  • A strong credit score is typically necessary to reduce the interest rate and improve overall terms


(904) 580 - 4698


Site design & development by JP DESIGN


              Mellen Money Management. All Rights Reserved.

Privacy Policy   |   Terms of Use   |   Disclosure Brochure