People who are new to the workforce — or have recently switched careers — can face pivotal moments when it comes to developing smart financial habits.
Keck Medicine of USC’s Community of Mentors for Professional Advancement, Support and Success (COMPASS) recently hosted a personal finance seminar to help these audiences develop strategies early for a long-term payoff.
The virtual event, led by Ryan MacDonald, director of business development for USC Credit Union, and Ekta Vyas, PhD, MS, chief human resources officer for Keck Medicine, can be streamed here in its entirety.
Here are three key takeaways from the discussion:
1. Designate set amounts for needs, wants and savings
MacDonald opened the discussion with general budgeting advice, citing the standard 50/30/20 system (in other words, spending 50% of one’s income on necessities, 30% on “wants” — which can range in scope from vacations to takeout — and 20% on savings).
MacDonald acknowledged that the high cost of living in Los Angeles may prompt many people to spend as much as 80% of their income on necessities. To adjust, he recommended going through want-related expenses to see what can be cut. MacDonald explained that limiting even the smallest regular purchases can add up — and that money can be added to savings, which is crucial.
“Right now in this high-inflation market that we’re in, we need to set aside three buckets for savings. One is for emergencies,” MacDonald said. “Life is full of surprises, as we’ve seen over the last few years. The second is for long-term goals such as homeownership or continuing education. The third is to grow your retirement fund.”
Paying off debt should also be included as part of the savings budget, MacDonald says, because both goals are equally important and time sensitive. For people paying off multiple accounts, he recommended a debt consolidation loan to combine all the owed amounts into a lump sum with a lower interest rate.
2. Bank with a credit union for more benefits (and fewer fees)
When asked how people can further grow their savings, MacDonald recommended credit unions as an alternative to big banking institutions. Instead of being owned by shareholders, credit unions are owned by the people banking there, who are called member-owners.
This arrangement, he said, can bring many financial and logistical advantages. Among them: often lower fees and higher interest rates, better loan pricing and flexible access to capital.
3. Know your professional worth when negotiating salary
Since a key part of saving is having income to save, Vyas focused her talk on how young professionals, job hunters and those who have recently switched careers can increase their earning potential.
Although Vyas acknowledged that health care is currently one of the top hiring industries in the nation, she stressed that candidates must research the market value of their qualifications and then make a concrete plan of action for an ascending career track.
Workers happy with their current employers usually don’t have to leave if they want to grow their careers. For example, Keck Medicine takes pride in helping employees to advance. Just remember: As with many goals, you get back what you put in.
“Be a team contributor, be a good citizen, commit to shared goals, enhance your skill set, and be proactive about having the conversations with your manager,” Vyas said. “And keep an eye out for jobs coming up to see if you’re ready for any of them. Certainly, there are a lot of opportunities at Keck Medicine.”
USC offers a wide range of employment benefits to help employees put these tips to good use — and grow their money. To learn more about any of these benefits, click their link below.
- USC Credit Union
- Vitality health assessment incentive
- MetLife preventive care benefit
- Retirement benefits
- Tuition assistance
- Tuition exchange program
- Fitness credit
- Childcare centers
— Kate Faye