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What I’d Tell My 21-Year-Old Self About Money

Personal Finance

As a new crop of college graduates enter the real world following graduation season, many of them will be new to renting apartments and paying their own credit card bills for the first time.

Lady laying on a bed on a ground covered with leaves

In reflecting on the months following my own graduation and entrance into the working world, here’s what I’d tell my younger self about money.
How would you tell yourself about saving money

Start using credit (responsibly, of course)

Yes, you have a credit card, but you rarely use it because your parents warned you about avoiding debt.

But in order to build credit and qualify for a mortgage and better insurance premiums someday, you need to actually use your credit card. Credit cards offer better consumer protections than debit cards anyway, so start swiping that plastic and paying off the balance each month as you know you should.

Then when you’ve built a decent credit history, get a cashback credit card to earn rewards on your purchases (don’t just use the cashback to justify extra purchases!).

Stop wasting money on cheap stuff

I know it’s fun to buy a cute top at H&M or a funky picture frame at Target. And $20 here or there may not seem like a lot but over time those little mindless purchases add up, making it harder to buy pieces that are better made and last longer or save up for things like vacations or down payments.

Before you buy something, ask yourself: Does this really fit me without alterations? (Let’s be honest: you’re not going to pay for tailoring, so don’t settle for good-but-not-quite-right.)

Is this going to look stylish a year from now or is it likely to fall apart or look hopelessly dated? Does this match what I already have at home or will I use this to justify more purchases in the future? Would I rather have this now or will I find something better later?

Be choosey about your apartment

Rent will be your largest monthly expense, so choose wisely.

Moving at the end of each lease because your roommates turn out to be bullies or your bedroom is freezing cold and your landlord forbids space heaters wastes a lot of time and money (movers, broker fees, etc.).

Do not settle on an apartment because you’re tired of searching or the rent is cheaper than your last place or you fall in love with the roommate’s cats.

Get to know your potential roommates as people. Ask about things like heating bills and noise and maintenance issues. Find out your rights as a tenant.

Then stay in one apartment for as long as humanly possible!

Don’t keep up with the Joneses

Our generation came of age watching “Sex and the City” and dreaming of a fabulous urban lifestyle, complete with Manolo Blahniks and expensive martinis.

In reality, there’s no way that Carrie Bradshaw could afford all those shoes or a Manhattan apartment! Good, quality shoes and work clothes do make a better impression at the office (seriously, stop buying shoes from Payless!), but you don’t need to drink $12 fruity cocktails (in fact, this can make you look even younger than you are).

Enjoy a glass of wine from time to time—it has less sugar and a lower price tag—and find friends whose idea of fun doesn’t completely revolve around barhopping. They’ll be more genuine and more interesting, too.

Skip vacation guilt

When you go on vacation—as you should!—don’t drive others crazy pinching pennies, obsessing over who ordered a second glass of wine or spending three hours bus-hopping with luggage when a $20 cab ride could get you there in 20 minutes.

Vacations should be enjoyed, so set aside money before you leave so you can loosen the purse strings a little and relish the experience without stress.

What would you tell your younger self about spending, saving or budgeting?

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Photo credit: martinak15 via photopin cc

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