Seven Financial Things I’d Do If I Were Starting Over
The personal finance blogosphere is teeming lately with book reviews and tips for folks who are just starting out in the world of personal finance. Trent over at The Simple Dollar recommends what he calls The 50% Solution for people just entering the workforce ‘” put 50% of each paycheck into savings, and live off the rest. Lynn at WiseBread recently reviewed the book Rich by Thirty. (Wish I’d had this book before turning thirty this year.) And our own Melissa has reached the six-month anniversary of living in the Big Girl World.
And this has all got me thinking: if I could rewind to when I was first starting college, what financial decisions would I have made differently?
Of course, in a perfect world, I would have come from rich parents who taught me how to handle money and invest it wisely. And I wouldn’t have student loans. But we work with the hand we’re dealt! So what could I have done better?
- Used the library more often. A lot of the credit card debt I racked up during college was due to purchasing, rather than borrowing, most of the books for my classes. In retrospect, I could have taken better advantage of the library and reserves.
- Passed on theater as an extracurricular. It was fun, but the late-night parties and occasional splurges on costume items helped send my spending sky-high.
- Eaten in more often. There were oodles of excellent restaurants in the area I went to college ‘” hard to resist when dining hall food is substandard night after night. But there were always other options, like cooking in the dormitory kitchen. And once I moved to a co-op and eventually off-campus, I could have spent more time in my own kitchen.
- Found a better campus job sooner. I didn’t find a well-paying campus job until junior year, which meant I spent a lot of time trying to juggle two and even three part-time jobs at the same time as school. It left me frazzled, without much time to study. Won’t make that mistake again!
- Taken an economics course. My college has one of the most well-known economics departments in the country, and it would have been great to come away from there with more understanding of macroeconomics.
- Accepted a higher-paying position upon graduation. Right out of college, I was offered a job at a very young startup. Leery of the post dot-com boom, I instead accepted a position with my college, for $11k less but with more benefits and stability. While I enjoyed the job I accepted, and learned a lot in that environment, it would have made a lot more financial sense to rake in that extra $11k each year. (The company I was skeptical of? Upromise.)
- Stayed in one place. I moved five times in as many years, right out of college, including one very big cross-country move. Every time you move house, it’s expensive. I would have tried to find an apartment right away, and really analyzed the need for moving house so much.
If you found yourself starting anew, what changes would you make to ensure your financial security? Share in the comments!
Hmm, I stayed in one place for five years after college and didn’t realize how much money I was saving. But here are some things that would have netted me even more money:
– Graduated after 3 years. I didn’t have enough AP courses to make this an option, but it certainly would have saved a lot of money.
– Lived off-campus instead of in the dorms
– Bought my first apartment instead of renting it. I ended up staying for 5 years during which property values skyrocketed in Seattle. Of course, I didn’t have enough money for a downpayment at the time, and I had no idea the real estate market was going to boom, but we’re talking perfect fantasy decisions here, right?
On the other hand, it’s never too late to learn macroeconomics!
(Also, you would have hated sitting in section with overeager first-years and incomprehensible TAs.)
1) Started a 401(k) as soon as possible, and invested more aggressively
2) Finished my degree – I’ve been turned down for interviews because I don’t have a degree, even though it is nearly 30 years since I was supposed to have graduated. It is just a stupid piece of paper, but when there is a lot of competition for jobs requiring a college degree is a lawsuit proof way of reducing the number of resumes you have to look at.
3) Learned to cook – I spent a lot of money on restaurants that I could have used for better purposes
4) Made more time for fun – The other half of financial acumen is spending wisely, not just spending less. I never took a long vacation, rarely went anywhere other than to visit friends, and in general shortchanged myself with respect to the number and variety of experiences I had. I was rarely money limited, but rather time and imagination limited.
5) Set up an automatic withdrawal program into some sort of investment account. I blush today when I think of how much money I kept in low interest savings and checking accounts. Pulling a few hundred dollars a month into a money market account, and then gradually rolling some of that into short term bond or other medium term investment accounts would have increased my wealth substantially.
I would have:
* Lived off campus starting my junior year – I think I was ready for it by then, it would have been cheaper, and I was so much happier living off-campus my senior year.
* Not bothered buying the first clunker truck I owned – it came in handy for moving a few times but renting a moving van would have been cheaper, I shelled out too much on maintenance for the brief time it kept running, and I never really intended to use it for commuting given that I was so close to so many public transportation options.
* Not allowed myself to cruise along for months after graduating by patching together part-time hourly jobs. Bad, bad idea; I should have sought out career counseling well before graduating.
I ate out way too often. Dunkin Donuts + fast food 5x a week not only made me fat but made my wallet thin. The worst of both worlds.
I really wish staying in one place would have been possible for me 🙁 It really is expensive, and only getting worse. I had to drop all of my stuff in Boston, and I’m currently stuck paying 125/mo rent on a storage unit. *sigh*
and I agree on the economics course, though I’d like to see economics being taught earlier. . .WAYYYYYYYYY earlier. I learned about condoms in 5th grade, but only learned about budgets two years ago. I find something seriously wrong with that.
1) Started participating in my 401K as soon as I was eligible instead of putting it off because I was intimidated by the paperwork.
2) Paid closer attention to my investments and not let my stocks dwindle to 40-50% of their value. Buying and holding is a good investing strategy up to a point. Letting the stocks fall that far was just stupid of me.
3) Done more research about buying a home much earlier. I thought real estate prices in Boston were so expensive that I couldn’t possibly afford anything. If I had at least started learning what was involved (even before I thought I could afford anything), I would’ve learned about various programs designed to help lower-income first-time homebuyers out. I would’ve learned that it was possible to get a home with very little money down.
Waited to buy most of my electronics. I went through an “early adopter” phase. Please don’t ask me how much I spent on my now-obsolete 19″ LCD monitor and 32″ CRT HDTV.
Dan – ooh, that is too bad. I learned early on that being an early adopter was a very expensive proposition.
FitFool – owning stocks at all is impressive, as far as I’m concerned!
Christopher – great point about sex ed being taught earlier than basic financial savvy. Of course, if this presidential administration has its way, we’ll be taught neither…
Larry – I’m surprised and saddened that not having a degree, thirty years later, is still affecting your job prospects. You must have thought about going back to school to get that piece of paper, but what a ridiculous notion for someone with all that experience.