As many of us know, money is hard to talk about. In fact, sometimes talking about it is even frowned upon. I remember, as a teenager, sitting at dinner one night when my brother turned to my dad and asked him how much money he made. I remember my dad’s smirky smile, and his response: “enough to pay for everything you have.”
While this was true, it was also disheartening to hear. I remember asking myself why my dad wouldn’t answer that question. Was he afraid we would judge him for not making enough? Looking back, I can’t imagine that was the case. As a teenager, anything more than my weekly babysitting chump change would have seemed like a fortune. As I’ve grown and learned to navigate my way through this predominately money-run world, I’ve realized that I was utterly unprepared for everything I would need to do in order to be financially savvy. I didn’t learn any of it in school, and my parents, while they did teach us basic concepts, didn’t talk about money very much. Luckily, I’m now married to an accountant, who can help me understand exactly what a 401k is and why I should, in fact, be contributing to one.
While I am learning to figure this shit out, my little sister is six years younger, and just beginning her financial journey. She’ll be leaving home this fall to go to college, and there are a few money truths I want her to know (that I wish I’d known six years ago).
1. Credit is not something to be afraid of.
I still don’t have a credit card, and that’s a hard thing to live with in today’s world. In college, my excuse for not opening one up was that I didn’t trust myself. That’s true, and while I am grateful I don’t have an enormous amount of debt racked up on late night munchies, or bad shopping decisions, I do regret not opening something to help build my credit. As of today, the only marks on my credit report are my two student loans. This is making it incredibly difficult to buy a car, or rent a decent apartment/buy a house. People want to see more credit history than I have, and while I may be young, I am in a phase of my life where I need decent credit to make important life changes. If I could go back, I would have opened a card built for college students, and put utilities and books on it, and paid the balance in full every month. Moral of the story: Don’t be afraid of credit. Build a healthy relationship with it.
2. A budget isn’t as restrictive as it is freeing.
For my entire financial life, I’ve been terrible with money. While I don’t have a credit card, I do pay cash for stupid shit. I always thought of budgets as restrictive and limiting, when there was so much life to live. (Insert eye roll.) I wanted to be free to spend my hard-earned cash on whatever the hell I wanted, and no one could tell me otherwise.
I distinctly remember getting to college, and receiving my first (tiny) paycheck from my on-campus job. I walked to the on-campus creamery/grocery, and bought everything I wanted. I literally blew my entire first paycheck on ice cream and goldfish. Had I been using a budget, I would have realized that while it was fine to treat myself, it would also be smart to buy actual food, or save some money for the campus-wide carnival coming up the following weekend. Because of this terrible habit, I lived in a week-to-week cycle of feast and famine. Even now, as soon as direct deposit hits my bank account, I so tempted to spend it all at once, but I have done that before, and I ended up with 25% of my paycheck to live on, after all is said and bought. Bottom line? Make a budget. Give yourself some fun money, but please for the love of all that is cheesy, put some money away for the future.
3. Not all student loans are created equal.
This one would have been especially helpful to know before I left for college. In my sister’s case, she has enough saved, and my parents are willing to help her, to make it through the first year. After that, unless she takes a break from school to work (which I highly recommend), she’ll have to supplement with loans, like I did. My loans are small next to other people’s, but on a part-time non-profit salary, it’s really hard to make my monthly minimum loan payment. As a pre-college adolescent, I knew NOTHING about what loans were like, or that there were other options. I literally accepted the first loans offered. I did no research, and took whatever generic federal student loan was offered. I also took more than I needed for tuition, and blew the rest on campus life.
My advice? Research your options. Figure out if you can get a grant, a scholarship, or a low-interest loan. Also, I would personally say to only borrow what you need. You will still have to pay back the money you wasted on bad tie-dye, and midnight cheeseburgers.
4. Negotiate your salary, even (and especially) your first one.
After college, I moved in with my older sister for a few months before I broke my ankle and was forced to move home. After a month or two, I was able to secure two retail jobs to start getting back on my feet. (Remember, I am terrible with budgets, so I didn’t have anything to start me off.) It wasn’t until six months after school that I found and landed a job that was relatively related to my degree. While that’s not an excessive amount of time to live without a degree-related job, I was living at home, and ready to get out on my own. Every day felt like an eternity when I was straightening hangers instead of writing my novel.
When I came in for my paperwork signing session, my now-boss slid a piece of paper across the table, with a number on it. It was lower than the number we had previously discussed, but I was so excited to actually have a salary, and figured they knew my worth better than I did. WRONG. I cringe every time I think about how wrong I was.
I wish I would tell my young self not to settle for what you think others see as your worth. You are the only one who knows exactly what you can bring to the table. I’ll be working for a while to make up for the loss of attaching such a small salary to the skills and abilities I have. I think this is important to know before you even start college, because the sooner you start advocating for yourself financially, the better.
5. Find what is important to you, and invest accordingly.
There are numerous articles and blogs out there claiming to know the best way to invest or spend your money. I would tell my younger self to start building an emergency fund, and to invest in myself by spending on things that truly brought me happiness.
For example, I had a roommate in college who LOVED to workout. She would go to the gym multiple times a day and take classes, teach classes, and meet people there with similar interests. She was willing to pay extra to be at a gym where there were classes, and a wide range of activities to get her work out on.
I, on the other hand, don’t actually like working out at all. I paid for a gym membership for over a year, because I knew it was good for me, and thought if I saw money leave my account every month, it would motivate me to go workout. Again, I was so very wrong. I do much better when I’m not pressured to work out, or can find ways to do it without spending money. I use the free gym at my apartment, or go for a run. I have a few free weights, and I follow workout videos on YouTube. Investing in exercise is not something that makes me happy. What does make me happy is reading, so I invest in books. I buy hard copies, or copies on my kindle, because my favorite way to end the day is with a face mask and a good book.
College is a great time to experiment and find what makes you happy, especially because you can take advantage of a lot of student discounts. You can take classes to try new things, and they count toward your overall degree. My advice to college students like my sister is, don’t get locked into anything too early, and take time to make sure it’s really something you love. I remember working out with my roommate, and while it was great to spend time with her, I didn’t get the same thrill out of a cycling class that she did. I’m working toward being in a place where I worry more about what book I’m going to read next more than when my next pay day is. That means budgeting, spending wisely, being informed, and making smart decisions, and I only wish I’d learned that sooner.
Hannah is a recovering binge spender, aspiring novelist, and baked goods aficionado. She dreams of being a stay-at-home dog mom, where she can spend her days writing and drinking copious amounts of coffee.
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