This is a re-print of a guest post I did for Money, Matter, and More Musings.
The Graduate
My brother-in-law is graduating from high school this week. Naturally, I reflected back to my own graduation, how glad I was at the time to be finished with high school, and how excited I was for college and the future. I also thought back at how naive I was in regards to my personal finances. So, I thought I would draft a letter to all the young people graduating from high school this spring and provide some practical advice geared towards their personal finances.
Dear High School Graduate,
Congratulations on your accomplishment! You should be proud. Newton D. Baker once said, “The man who graduates today and stops learning tomorrow is uneducated the day after.” With that, I offer you these words of advice for your finances as you continue on your journey of learning.
Start Saving Now
Save a percentage of every dollar you get, no matter if it’s given or earned. I know. I know. You’ve heard this before, but I promise you, along with getting your advanced degree, this is one of the most important things you can do now to secure your future.
You may not be earning much over the next few years, but very little is needed now in order to have a big impact later. It’s true that there is more time to save later, but your saving will never be as effective as it is right now. So, if you haven’t already, begin saving and make it a part of your normal routine.
Understand the Cost of College
I really want you to understand what it will take to pay for college. Most of you will either get scholarships, student loans, or some combination of the two. You may not stop to think about the true cost or to fully understand that student loan debt. Please, do not take on more student loan debt than you actually need. You’ll only end up blowing the extra money on “stuff” and food.
Lastly, don’t just sign the loan papers and move on. Sit down with someone who can fully explain the debt you are getting into and help you to visualize your future with this debt. Believe me, fully understanding this transaction will do nothing but cause you to apply for just a few more scholarships or grants.
Be Careful with Credit Cards
Now that you’re a responsible member of adult society, the credit card companies will begin soliciting you. Don’t listen to them or their sales pitches. Seek out trusted advice, understand the ramifications, and get a card (for emergencies) on your terms.
When you do use the card, use it with the knowledge that you will pay it off the following month. Never view the card as a way to finance your livelihood, and save the big purchases (car, flat screen TV, etc…) for later in life, when you’ve saved for them.
Find a Mentor
There’s always someone else out there who has been through it. No matter how smart you think you are, you can always learn something from others. Find someone stable and successful that you admire and pick their brain for every financial step you take. You will get ahead much quicker by learning from the mistakes and successes of others than by always trying to do it on your own.
Congratulations again on your success thus far. I wish you the best in your future and finances.
Sincerely,
PT from Prime Time Money
Do you have any other advice for a graduate? Leave it in the comments below.
Photo: by CarbonNYC
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I would tell college graduates -
There is no wrong answer to anything – but there is a foolish answer. When entering into any endeavor – financial or otherwise – do your research, sleep on it, and ask more than just your friends and close family for their opinion. Listen to older, smart, successful people and don’t write them off as ones who aren’t “with it.” But don’t let go of your dreams for pragmatism, either.
I remember clearly one time in 2005 when I was talking with a coworker about some things I was going through in my life. He was 15 years older than I was and his advice was not advice I wanted to hear. I thought he was being strict, and unforgiving, and silly. But on my walk home I realized that he really knew what he was talking about, and after weighing all the options, I decided to do what he had recommended. Two years later, I am so, so, so happy I listened to him and his wisdom. When I told him the next week what I’d done, he laughed and hugged me and told me, “Wow. You’re the only kid I’ve ever had actually listen to me. You’re going to be wiser than all of your friends if you actually listen to what older people have to say.” And he was right
Thanks for posting this, PT! It made me think about this happy memory, and about what I wish I’d known when I left school!
Shanti – Wow. This is probably the best comment PTM has ever received. This should be a full post.
I agree. I consider myself a pretty cool guy but I get the “your not with it” vibe from those young ones in my life that I offer up just a little advice to.
You’re right, there is no wrong answer. In fact, the foolish answer is often praised and rewarded in society.
Thanks for sharing, Shanti.