When I entered college, I had no debt. Well, I guess I had some as I’d already signed the papers, but hadn’t received the money, for the loans I was going to be using to partially finance my education. When I finally graduated, 7 and a half years later, I had mountains of the stuff. Nearly 30k in college loans, close to 10k in credit card debt, a car loan, and a mortgage.
For the high school graduates: If you learn nothing in college, learn to avoid debt. That single thing will make the rest of your life so much easier. It allows you to start ahead of every single one of your college peers, and will make it so much easier to achieve the goals that you want in life.
If you’re reading this, and you’re a college graduate that never got the above bit of advice, you’ve likely ended up like I did. Lots of debt. Here’s my advice to you (and roundabouts to my past self).
- Learn how to budget. Creating and maintaining a budget opened my eyes to the ways that I was spending (and wasting) my money. Create a budget for yourself and stick to it.
- Learn how to avoid debt. Very few of you will be able to completely avoid debt. Minimize it. Pretend it’s your leprous uncle. Instill an aversion to debt.
- Learn the meaning of appreciation. If you’re going to add debt, only do so to buy something that you expect to appreciate. New furniture doesn’t count. Houses sorta count. Cars absolutely, positively, do not count.
- Learn the value of shared costs. Just because you’re a big boy (or girl) now with a fancy diploma (with fancy calligraphy), does not mean that you’re above having a roommate. In fact, I would encourage it (unless you’re married, because that’s just a bit weird). It doesn’t even take a calculator to figure out that rent/2 is better than rent/1.
- Learn the value of patience. Just because you can get a mortgage or a car loan, or whatever, does not mean you should. Statistically speaking, you’ll change jobs several times over the first 5 years of your career. Do you really want to be tied down to a house if you need to move to another city? Slow down and ease yourself into your adult life. It’s not all that it’s cracked up to be anyways.
- Learn the word Retirement. Sure, your all excited about your newly earned earning potential and your fancy new career, but, if you’re like every other person on the planet, you’ll want to retire at some point. Start saving now to make that dream come true later.
- Remember to have fun. Just because you’re all grown up and joining the “real world” doesn’t mean you can’t still have fun. Your hobbies and activities are what make the “real world” worthwhile.
- Wear sunscreen. None of you will get this reference as you were probably 8 at the time. The rest us do and it’s not that important. (in case you’re curious: http://en.wikipedia.org/wiki/Wear_Sunscreen)
The preceding is, by no means, an exhaustive list. In fact, it can’t even really be considered a quick and dirty list. It is, merely, a list of a few things that I have come to think of as some tenets for post college life. Some, I have learned, others I wish I had.
Congratulations on your graduation, and best wishes as you join the rest of us in the real world.
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Personally I would also say to get repaying your student debts as quickly as possible. I am in my final year of payments and hope to be clear by Christmas but I kept on putting off making repayments and know that I would have had them all paid off a lot sooner if I had squared up to the debt and started paying it off sooner. By all means have some fun with your money, but just appreciate that your student debts will have to be paid off sooner or later and the sooner you get it done the sooner you can start to enjoy life with one less responsibility hanging over your head.
If I could offer you one piece of advise for the future, sunscreen would be it.
Great article and great advice. I’m just about to leave University in England and people get into a weird habit whereby they get it into their heads that all this student loan, and debt is free money. Regardless of the cons of debt, it instils bad habits and a bad attitude towards money. There is no such thing as a free lunch and one day the lunch-lady will come-a-hunting!
Thankyou
I would add that when offered student loans, do not take more than what you need even if you feel that you “really could use it.”