Post-College Financial Lessons

My post-grad experience has been typical of many of my friends, complete with college debt, no money, and certainly no money to jump into being able to pay for an apartment or put a down payment on a house. My friends and I share our experience with thousands, of college grads all over the United States who are living at home to save money and pay off any debt before really settling down. Graduating from college comes the pressure to know exactly what you want to do and how to get there. But the reality is that it isn’t that easy. Many of us don’t know what we want to do with our lives, and statistics about people like us that surface the internet simultaneously give us comfort that we are not alone, while also putting added pressure on us to defy the stereotypes placed on us.

I don’t want to spend time feeling sorry for myself or my fellow peers in writing this blog, because truly, that won’t get any of us anywhere. What I would like to do instead is to explain what I would do if I could do it all over again.

These are my mistakes. This is what I would do differently:

1. I would live at home throughout college. If I did nothing else different, I would have half of the debt I have now.
2. I wouldn’t have spent half my savings my sophomore year of college. I would have significantly more money now and life would be so grand.
3. I would have gone to a tech school to get my associates before going to a 4 year college. If I did that, and lived at home all through that time, I would have have ¼ of the debt I have now, maybe less.
4. If I did number 3, coupled with working throughout college and paying my tuition as I went, I would have NO debt! No debt! People do it every day, and it is amazing!
5. I would have majored in something really really awesome that I love! I wasn’t crazy about my major and I put myself through a lot of unnecessary stress because of it. If I went to get my associates first, that would have given me time to figure out my passion (which I have learned a lot about over the past several years). I say that only because I don’t plan on getting a job in what I majored in, and I almost knew that from the beginning. I am one of the thousands of people who don’t know what they want to do with the rest of their life, and that really affected me in college. I would have been able to pinpoint a job with my degree a lot better had I majored in something I planned to use.
6. I would have gone to a tech school and been done. Maybe I would have done graphic design or welding. I don’t know.
7. I would have done more research when I was applying for college. Enough said.

I thought I knew everything when I was in high school and college. Turns out I was wrong. These ideas are ways I could have saved money, but I didn’t do it all wrong. Here are some tips that worked for me:

1. When I wasn’t spending, I was saving.
2. I worked in college so I didn’t use my refunds from my loan to live off of. Sending my refund checks back really cut down on my total loan cost.
3. I lived at home 2 out of 4 years of college which saved on dorm and apartment costs.
4. I went to a state school. Private schools are quite expensive.
5. I joined a program after college that would help pay my student debt.
6. I continue to live at home and defy social norms post-college to save money.
7. I never buy anything full price.

Just some things to think about as you go to school, graduate, or start living on your own. I am always interested in financial lessons learned by others if you are willing to share. What is your story?

The Spending Diet: Challenge Accepted

I like to be honest when I blog because I when I read other people’s writing, I like to be able to either relate, or not relate. For instance, someone who makes tons of money and lives debt free might not get as much from the blogs I write compared to the low-moderate income person who is trying to pay down debt. We are all different, and when it comes to making life better and easier for us, we have to find out what works for us. That is why there are so many diets and acne medicines out there. Different solutions work for different people! I say this as a preface for the advice I write about. Most of what I write about is from research or my own personal experiences. I find finances really fascinating. I grew up in a house that talked a lot about finances and celebrated saving money and getting out of debt. I am always interested to hear others’ success stories and challenges. So when I came across a blog written by a woman named Anna who was able to pay off $24,000 of debt in 15 months by cutting spending, I had to know how she did it.

First, she made a list of her needs. From those expenses, she saw where she could cut costs. I decided to immediately make this list, and here is what I came up with:

-Student Loan

-Car Insurance

-Gas

-Cell phone bill

-Gym Membership

-Gifts (had a really hard time with this one. She says it’s not a need, but I feel it is a necessity to give people gifts on occasions and holidays)

-Coffee (morning ritual; she says it is a want, but it is something I could cut down on)

Next, she says to stop spending money except for things that are on your NEEDS list.

Since this is The Spending Diet as apposed to the Spending Fast, she is allowing herself to spend $100 a month on non-needs (entertainment, clothes, etc.). This was a hard one for me (I am not quite ready to embark on the Spending Fast). Cutting down my non-needs to $100 is going to be tough, but the money left over can go to my student loan!

February Expenses:

-Coffee $20 (giving up coffee for lent starting February 13)

-Gift for a friend $0 (going to make it homemade this time which is hard for me because I love to buy people gifts)

-Superbowl $10 (gotta eat delicious food)

-Trip to Raleigh $40 (doing the Krispy Kreme Challenge)

-Valentines Day $20 (making and buying simpler gifts than what I usually try to do)

-Other $10

Wow. This is a big difference from last month. Anna says once the money is gone, it is gone. You can’t buy anything else besides needs for the rest of the month!

This is going to be tough but I am going to do this for my remaining 6 months and track my progress. I am excited to see where this will take me. If I keep this up, I could put quite a bit of extra money towards my student loan each month. We will see just how much extra I have at the end of the month. Will you take this challenge with me?

For more information on The Spending Diet, visit Anna’s website at andthenwesaved.com.

Marriage and Money

When it comes time to find that special someone to share your life with, we all kind of know what we are looking for. Some people want someone fun and kind, who wants kids, and has similar religious and political views. Other people might be looking for someone who loves music, hates the mountains, but likes cooking and movies. It comes as no surprise that we want someone compatible, which is why millions of people have turned to dating sites so they can filter through to find someone who shares their interests and values.  And while it is easy to get caught up on the trivial things like the necessity for blonde hair and a golden doodle puppy, how many people think about important factors like money when they are looking for a potential spouse?

There have been plenty of successful marriages between people of differing views on money, but it isn’t easy. In fact, money is the number one argument between married couples today. Whether it is about living beyond your means, or too much independent spending, there is no denying, good or bad, that money plays a big role in marriage.

I am not married nor do I plan to be anytime soon. But when I finally decide to tie the knot, I want to share the same financial practices and goals as my spouse. I want to save money every month, only eat out a certain amount a month, enroll in the company I work for’s 401k, and invest. But this is so much easier said than done because I can’t just change the habits I might have, or that my significant other might have, in an instant. Why is all this important? Why should couples have the same financial goals and practices? Why can’t we have the fancy cars and the big house right now if we can afford the monthly payment? Why why WHY?

In order to make this lifestyle change that affects not only you, but the future of the inhabitants of your home, you have to know why what you are doing is important:

You must save money from every paycheck.

It is important to save for emergency situations and for the future of your family. Experts say having 3-6 months of living expenses in an emergency fund is vital in case something were to happen to your job or your spouse’s job. This isn’t just for married couples – this is for everyone! Put aside money each month into your savings account. If you aren’t able to have it automatically in there when your check is deposited, check out online banking and move it each month on your own which is what I do. Saving money gives you stability and can help you with big purchases. If you are tired of living in an apartment and paying the rent of your landlord (In one year’s time, you will spend an average of $9000 if you are renting. Live in an apartment for five years, and you have put in $45,000 of money you can’t get back), start saving! Cut out extra expenses like eating out and stop impulse buying. Before you know it, you will have enough money for that down payment. When you have your house, it will be your own. The more payments you make, the more equity you will have in your home, whereas with an apartment, the more payments you make, the more you lose. If you are having trouble saving and/or are interested in down payment assistance, visit our website at www.newcenturyida.org.

You  have to think about debt.

Whichever lucky person marries me will inherit $30,000 of debt! Yay! Debt is definitely something to talk about. You don’t want any surprises. You don’t want to find out after you are already married that the IRS has been garnishing your spouse’s wages and they haven’t filed taxes since 1990. Or that your spouse has thousands of dollars of credit card debt and collection agencies won’t stop calling. You have to be open and honest and make it your goal to pay off your debt. Don’t hide from it! It will be such a relief when it is paid off! Not only that, when you wait to buy something until you can afford it, you are doing you and your family a favor. Sure, it might be nice to drive around in a nice car and live in a huge house, but would you rather be strapped for cash with a fancy car or have a manageable car payment/a car paid in full that is average or above? I’ll take the latter.

Budget

When you get married, you become a partnership. You have to stop thinking in terms of “I,” and instead think in terms of “we.” What do we need? What do we want? How should we fix this situation? So if your spouse goes out and buys a $100 pair of shoes, but you don’t have enough money to put food on the table, there is a problem. If you are trying to save, that means that the rule you guys established about not buying Starbucks for a while applies to you, too! It is important to know where your money is going each month. I know some couples who have a certain amount of money each week, and when it is gone, it is gone (single people can do that, too; I haven’t managed to make it work yet, but I am working on it). Whatever works for you and your family.

Living paycheck to paycheck is stressful.

Not having any savings and depending on that check every two weeks to get by is so so stressful. Saving and budgeting is soo important if you want to feel happy about your money. It doesn’t mean you can’t have fun, but do so within your (agreed upon) financial limit. Also, you want to start thinking about your future. Do you still want to be working at 70 years old? If not, you and your spouse should look into joining your company’s 401k plan. If it doesn’t have one, talk to a trusted investor about saving for retirement.

I am no financial expert nor do I have any experience being married, but I do understand how important communication and being on the same page is when it comes to money and everything in between. This post is to raise awareness to talk about money before tying the not, and most certainly isn’t to discourage anyone from marrying the love of their life. So talk about it, read about it, and plan for your future!