Monday, April 26, 2010

Things I Wish I Knew 10 Years Ago

As I'm in the process of planning my 10 year high school reunion, I've been having flashbacks to 2000 the past few weeks. I've decided a couple of things: there would be music beyond boy bands, Y2K was actually not a big deal, and I had it pretty good as an 18 year old. I've obviously learned a lot this past decade, and I'm in a completely different stage of my life. I can't just blow off work and go to the beach (yes, I did that in high school) or I can't spend my whole paycheck on restaurants, concerts, and clothes (yes, I did that too). And while I've learned a lot, I think coming to adult terms with money and having a happy relationship with my finances has been one of the biggest changes over the last ten years. If I could travel back in time via hot tub or any other way, this is what I would have said to myself to save myself some heartache, stress and scary financial times:

Store credit cards are not free money.

When a store employee tells you that you can save 10% by just signing some thing and then you get such a convenient way to spend money at their store, Do. Not. Do. It. Don't get them for 5 stores. Each time you open a store credit card, your credit score (the number that all lenders judge you on) will take a hit. You'll be more of a credit risk. You'll spend money you don't have on things you don't need.

30-60-90 is not a suggestion.

Companies are not telling you it might be a good idea to pay within 90 days, or saying you really should think about it. They are telling you that they will take you to collections if you don't pay up within 3 months. This will affect your credit score. Don't pay late. You open yourself up to paying more money (at a minimum) and even not being able to qualify for loans because your credit score will be worse.

Opening a credit card to get a free t-shirt is a huge mistake.

There are lots of schemes to get people signed up for a credit card. Free shirts, free flashlight/bottle opener/mp3 player... but no one ever looks at the fine print. The interest rate is ridiculous, there are insane charges for cash advances (don't do that anyway), and fines for being late, leaving a balance on your card, etc. If you're seriously in the market for a credit card, do some research and figure out what card makes the most sense and offers what you're looking for.

Try to save, even a little bit.

It's hard when you're young and/or you don't have any money. You feel like there's nothing you can save. But dig deep. What if something bad happens and you have no cushion? Try saving $1 a day. That's around $30 a month and almost $360 a year. That would be a huge help if an emergency comes up.

Don't spend money on things that won't matter.

It's hard when you're under the influence....of peers. They're getting designer bags. Or new cars. Or fancy jewelry. But stick to your guns. Spend money on memories, not items. That Tiffany bracelet that everyone wears will pay for a weekend trip. The friends that you'll be grateful to have later won't care what your car looks like or what new item you added to your closet. You'll look back on pictures and fond memories for years to come instead of cleaning out your closet a few years later.

What about you? What's something you would have told yourself to do (or not do) 10 years ago?


  1. This one will be controversial: consider the cost of college. I went to an Ivy League private school and paid for it mostly out of loans ($90k total!). I could have gone to University of Oregon for free. The quality of the professors would have been less, but I'm not convinced the difference was worth the cost. I'm not necessarily saying it was a bad decision, but I wish I'd considered it more.

    Buy a cheap, small but reliable used car (Honda Civic, I'm looking at you). It's an order of magnitude cheaper than a new car when you consider cost of buying, insurance, maintenance, and gas. Lots of people get excited about their first paycheck and buy a brand new car but it's sooo much more expensive.

    If you have two hobbies, and one is really expensive, pursue the other one.

    Work during college. You build your resume, make money while avoiding spending it, and most importantly build up good work ethic and money management habits. I did do this but only because my parents made me.

    Living with your parents may be uncool but it saves you a thousand bucks a month. How much can you do with that money?

  2. Yay for 10 yr reunion ;)

    I agree about the "always be saving" and being under the influence of peers. It is tough though!

    My goal is always to spend more on experiences than "things."

    I second the "work in college" idea David had. I had so much spare time in college, I should have been working part time the entire time.

  3. David and Newlywed - I definitely agree with the working in college! I did it, too. It helped me stay more organized (I do better when I have more going on), plus paid me money and gave me work experience that was relevant when I applied for jobs out of college.

    And living with your parents - also a good idea, even if it's for just a year. I would have totally done it if we lived in the same state.

  4. I went to a commuter college instead of living on campus I lived at home and drove 25min to school every morning, while I did have to spend $ on gas, I saved a LOT on room/board.

    I follow the rule of 3's when shopping... if you touch something once, it caught your eye. if you touch it twice you're interested in it. But only if you come back around and touch it a third time should you buy it... otherwise it's not that important to you!