Personal Finance Advice For Young Adults

First Job and Freedom

When I was 16, the first thing I did was get a job, because my mom said that if I wanted to get a car (which I desperately did), I had to pay for it myself. She also said I had to pay for all of it’s related expenses, like gas, insurance, and repairs. I worked as much as I could for a summer, and finally saved enough for an old, gas guzzling tank of a car. I even started my own savings account, complete with debit card. I got my insurance through my mom’s insurance agent, without shopping around at all. Perhaps that was a mistake, but I will never know. At the time, there weren’t many resources giving personal finance advice for young adults, so I flew by the seat of my pants.

Most of the time, my whole paycheck ended up going to my car. I remember sitting in Denny’s with my friends and only being able to order a soda because that was all the money I had if I wanted to have enough for gas. I didn’t mind, though, because I was “free.”

Meanwhile, I had applied and gotten accepted to college. I had filled out all the forms for federal financial aid, and been awarded an offer of grants and loans. I was to start in the Fall.

Well, my car was old and ugly, and it cost a fortune in gas. So, I got to thinking that I should buy one at a dealership, where I could pay payments. Turns out, they wouldn’t touch me with a ten foot pole, because I didn’t yet have any credit, but the student loans I had agreed to were already showing up in my credit file. I was furious! I had a steady job that would more than cover the payments. I didn’t understand what the problem was. Right then and there, I vowed that someday I would have good credit, and I would buy myself a Lexus like the one I test drove that day.

First Money Mistakes

Knowing what I know now, I wish I had immediately made it a habit to save some of each paycheck. Even if I had only put aside $20 per week, I would have had thousands more by now if I had started so young. In fact, I could have approximately $72,551 by now, assuming my savings earned 5% per year on average since I was 16. That is the average return on stock based investments, such as IRAs.

Mistake number 2: I didn’t apply for a single scholarship. I just assumed I wouldn’t qualify, so I didn’t put in the effort. What I got in return was a whopping student loan debt, to the tune of $85,000.

These are the mistakes I made before even graduating from high school. Since I was winging it on my own, I had to learn a lot of things the hard way as I went along. Continue to explore this site to follow along on my journey, and learn more ways to avoid making my mistakes.

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