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What I Would Want to Do if I Just Graduated From High School…

June 12, 2011

I just watched a couple hundred of my former students graduate from high school. Now, life starts. I’ve been joking with them about “adulthood” and “reality” starting…but I’m only half-joking. Life really is about to get pretty serious, especially when it comes to finances. As I talk to young married people about finances, one of the worst parts about graduating from college is paying off the debt that often comes with college-life. Many young adults struggle with tracking and budgeting their money. And many people, early in marriage, struggle with their new spouse’s financial history (of mistakes). Some of these lessons take years to learn, and some of the consequences take decades to get out from under. Here are a few ideas, suggestions, whatever you want to call them…

  1. If you haven’t already, start tracking your spending. If you’ve been spending your parents’ money through high school, you may not be used to tracking what you earn/spend. Now is the time (it was actually about 4 years ago) to start watching what you earn and spend. At the least, find a notebook where you can start keeping track of paychecks, grant money, etc., and keeping track of every penny, along with the category of each transaction. I know, it is monotonous. I get it. But problems arise if you don’t see where your money is going.
  2. Try to set a weekly or monthly budget. Have goals and limits pertaining to what you spend. Once you’ve hit your limit for clothing, stop spending on clothing! Once you’ve downloaded your budgeted limit on iTunes, stop downloading stuff. Next month will come and you’ll be able to download a few more songs. You’ll get used to it.
  3. Try to have some control when it comes to student loans. Mistake number one: borrowing way more than you need. Mistake number two: spending loan money on non-school-related items. I recently talked to a really nice guy who said, “We took out a loan for XXXXX, but blew half of it on YYYYYYY. Now I’m not sure what we’re going to do about XXXXX.” Nice guy, lame plan. Sometimes people forget that these loans are going to come due, right about the time you’re trying to start a family. So, even though you will almost certainly have to take out a student loan(s) at some point, be modest, and stay disciplined as you spend that money.
  4. Take as much free money as you can. There are so many scholarships and/or grants out there to be had. Apply for as many as you can. I recently talked with a parent who “hired” his daughter to fill out scholarship applications for her college experience. Every time you are granted $400, you’ve paid for at least a few books for next semester. Get applying! Also, if your parents are in a position to and are willing to help out financially, take it (humbly and thankfully). Now isn’t the time to stand on principle alone. Once you are out in the cold, cruel world of working a full-time job, you can explain to your parents about how important it is for you to “do it on your own”. Now wouldn’t be that time!
  5. Learn to work. I worked all through high school and college. Every day of it. I’m not sure if it was the wisest thing in the world, but if you can’t pay your monthly bills, you can’t go to school!
  6. Don’t fail classes. They’re expensive. Taking them twice is expensive. Taking them three times is more expensive. See? Math paid off for me….
  7. The minute you get your first “real” job, start taking advantage of their 401k plan, if they have one. It is free money. Free.
There’s probably more, but you’ll figure it out. Good luck! You’ll do great!
Any other financial advice you’d dole out to a newly graduated young adult?
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