For new grads, sound financial philosophy leads to peace of mind

Congratulations to all new college and high school graduates — and their parents! Graduates now begin a new stage on their life journeys — a stage that includes increasing financial responsibilities.

The financial “philosophy” you choose to live by, along with the decisions you make over the next decade, will go a long way toward determining whether your life will be filled with purpose and financial peace or with regret and financial bondage.

The principles for succeeding with life and money haven’t changed through the years, but the culture has. Those societal changes make it more difficult to make the right choices, especially for young adults. What used to be common sense is now “old-fashioned” and out-of-date.

Rampant consumerism and consumer credit lead to spiritual and financial bondage rather than true freedom, yet many are caught in their grasp. The average college student graduates with more than $4,000 in credit card debt and about $27,000 in student loans.

The prophet Isaiah warned us about the risks of setting life’s priorities apart from God: “For my thoughts are not your thoughts, neither are your ways my ways, says the Lord. For as the heavens are higher than the earth, so are my ways higher than your ways and my thoughts than your thoughts” (Is 55:8-9).

Steps to success

What steps can you take to make your transition to financial responsibility a smooth one? It starts by embracing the Church’s teaching on being a “steward of Providence” (see Catechism of the Catholic Church, No. 2404). This teaching recognizes that God is the ultimate creator and owner of all that exists, and that he has made us his stewards, or managers.

We are all stewards. The question we will all answer over the course of our lives is: what kind of steward we will be? We should all strive to live so as to hear the Lord say, “Well done, good and faithful servant” (Mt 25:21).

Learn basic financial skills — what I call “Financial Planning 101.” This includes how to create and manage a financial plan (Lk 14:28-30).

Learn how to save for future obligations (including reserve funds), which means being able to say no to something today, so you’ll be able to provide for higher priorities down the road (Prov 13:11).

Understand the difference between productive and unproductive debt (Prov 22:7). If you are a college graduate with credit card debt and/or student loans, eliminate it — first the credit card debt, then the student loans.

If you are a high school graduate and you end up using credit cards down the road, only purchase what’s in your budget and pay the balance off in full every month. Limit any student loans to an amount that can be considered productive.

If you are dating someone or preparing for marriage, make sure to include money issues as part of the discernment and preparation process.

It’s critical that there be unity in marriage (Gn 2:24) with money issues, and that unity should revolve around the principles of being a steward of Providence.

Living your life out as a steward of Providence will not only help you achieve financial independence but, even more importantly, live out that independence in ways that honor the Lord.

God love you! 

Phil Lenahan is the president of Veritas Financial Ministries ( and the author of “7 Steps to Becoming Financially Free” (OSV, $19.95) and Generation Next" target="_blank">“Generation Next: A Catholic Guide to Financial Freedom for Young Adults.” Submit questions for columns to