We all hear the same advice when we start our career and it’s time to take full financial responsibility for ourselves: make a budget, pack lunch, skip the latte. Here are the pieces of money advice I ignored early on in my career, and how that affects me now, at age 26.
1. Make a Budget and Stick To It
It seems like such simple advice, but it can be a hard habit to keep up with when you’re not used to tracking your spending or tallying up your daily purchases. My first job out of college paid a $43K salary. Paying rent was always a challenge. I went without Wi-Fi at home and passed on countless outings with friends. Looking back, all of that could’ve been avoided if I set a budget for myself. Instead of spending $20+ a day on coffee, lunch delivery, and a casual drink after work, I could’ve avoided stressing out over bills, started saving, or chipped away at student loans. All of which would’ve helped my finances now, almost five years later.
2. Talk About Money With Your Partner.
My only relationship in my early 20s was initially long-distance. We never spoke openly about money because it seemed like we were both doing okay – our apartments were paid for, we had newer cars, and we were consistently going out with friends. When we visited each other, whoever was hosting would foot the bill for food and entertainment costs. Personally, it was a struggle to cover days’ worth of activities for two people during those visits, but it seemed fair to divide it up this way. I felt anxiety around the costs but ignored it in an attempt to build fun, memory-packed weekends. I assumed my partner wasn’t feeling the same pressure. He seemed cool, calm, and collected when swiping his credit card.
Years later, we began living together and still hadn’t spoken openly about our income, debt, or financial goals. I learned at that point that most of his income was being allocated to debt repayment, including credit card debt, student loans, and a car loan. Ultimately, this caused many of our shared expenses to fall solely onto me. This single-handedly had the biggest negative impact on my finances in my early 20s and could have easily been avoided by following some basic money advice.
3. Build Your Credit — Responsibly.
I avoided this for years. At 18, I opened up a store credit card (thanks, but no thanks, Victoria’s Secret) which gave me a terrible first experience with credit cards. I signed up because of the immediate incentives, like free or heavily discounted merchandise. But at 18, with a part-time and low wage retail job, I quickly got in over my head and ended up paying hundreds of dollars in interest over a couple of years. So I avoided a new line of credit like the plague until I was 22. I noticed that I would be passed over when applying for apartments because my credit score was low (only a small amount of credit history, a closed account, etc.) I eventually got a single credit card to consistently use over the next five years. Between regular student loan payments and responsible use of the new credit card, my credit started slowly building and improving. This helped me apply for apartments with ease and secure a great interest rate on a car loan years later. Lesson learned: Only use a credit card to buy things you can already afford. Doing so will help build a high credit score with time and consistency.
4. Find A Side Hustle.
I wholly avoided this in my early 20s. I was happy to be done with the grind of overlapping school, internships, and part-time work. I thought my full-time job should be enough to provide for myself, and most of the time, it was. But why spend free time bored at home when you can be walking dogs or freelance writing or thrifting and reselling clothes? Even though I didn’t desperately need the extra money, this advice came in handy years later, when I was able to put more money towards student loans, pay off credit cards, and feel less guilt when I wanted to make bigger purchases. I still think about how much more I could have paid off if I started sooner (and how it could have snowballed to help me with my goals now!)
The same financial advice is shared again and again on Instagram accounts, blogs, and countless podcasts – all aimed at young adults trying to find their financial footing. We all make mistakes in the process. Still, it’s possible to recover and even thrive once you learn why this advice is important.
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