It feels great to be debt free, but I wasn’t always blessed to be where I am today financially. I still remember the days when my budget had a line for credit card ONE and TWO (*palm to forehead*), an undergrad student loan, a grad school student loan, a Macy’s store card, and a car loan payment.
I only got to where I am today because I was sick and tired of not knowing where my money was going. Then I decided to finally sit down, write down my monthly payments and start keeping track of my spending. The truth was shocking, but it was what I needed to jump start the journey to financial freedom. Otherwise, I would’ve been oblivious to where my money was going each month and the financially destructive cycle would’ve just continued.
You live and you learn. That’s for sure.
If I could go back in time there are some words of advice I would have for my younger self.
You’ve just graduated high school and in a couple of months you will embark on a great journey. You will travel to New York and start college. You will have many choices to make on your own. Some choices will be harder than others, but at the end of the day make the choice that feels right for you. Listen to your gut.
You will come across financial decisions that will impact you further down the line. You may not realize it now, but it will set the tone for years to come.
Work, work, work
Yes in the words of Rihanna – work, work, work.. It may be hard to juggle 5-6 classes each semester and a job, but it can be done. You will have downtime so take advantage of it and make money. The more you contribute towards your tuition now the less you will have to borrow and repay back years later with interest.
Don’t get that credit card
Don’t be fooled by their marketing. Yes that credit card looks “so cute” with that cat on the front of it, but what is more important is the interest rate. Being a first time credit card holder your credit will not be the best so that interest rate will be sky high. That $30 pair of jeans that are on sale might cost you double by the time you are done paying it off. Is it really worth it? I’m going to say no.
Stop going to the mall
Your downtime, that should’ve been spent working, will be occupied by visits to the mall at times. Probably even weekly visits. Just don’t do it! Use that money you have in your checking account responsibly. You love shopping at Macy’s, but that doesn’t mean you need to sign up for their credit card to save a measly 10% with your first purchase. You love math. You love numbers. Calculate the “savings” and know that it’s not worth it girl! Retail therapy isn’t the solution – it’s the problem. You might be dealing with deep issues, but know that shopping is just a bandage.
Pay attention to your student loans
Do not and I repeat do not borrow more money than you need at the end of each semester. That extra cash you have is a loan and at some point you will have to pay it back. You will be tempted to blow away that money. To spend it on clothes, nights out, food, alcohol…you name it. Just be more responsible with your student loans. Only borrow what you need.
Save up cash for your first car
When you get back home from school and settle back in you will be tempted to buy a car. A fairly new car at that. Just because you can afford the monthly payments doesn’t mean that you should get the car. Again pay attention to the interest you will accrue by the time you are done paying off the car in 5 years. Yes I understand you love the car, but it’s just a car. A material possession. You just need a safe car to last you for a few years. Try something cheaper. If you still want that car (which you will still own to this day) it’s better if you save up cash for it. If the hustle & grind is still worth it after all that effort then it’s well deserved.
Get your master’s degree quickly and for free
When you start your first job after college, one of the perks is that a continuing education degree will be reimbursed 100% (pending a good GPA, of course). Take advantage of this and don’t waste any time because the offer won’t always be on the table. You don’t want more student loans now do you?
I’m talking about the stuff that you don’t learn in a normal classroom setting. You will live in the age where information can be easily found at your fingertips. If something sounds too good it probably is. Don’t just simply sign on the dotted line when it comes to your student loans. Know exactly what you are signing up for. The same rule applies to all the financial decisions you will make in your life.
I’m not trying to be hard on you. In fact I still want you to live your life. Just educate yourself more now. When you know better, you do better.