College

3 Money and Life Lessons for College Graduates

3 Money and Life Lessons for College Graduates | www.TheHeavyPurse.comEditor’s Note: Tanya from Eat Laugh Purr is back to share some practical advice for college graduates. If you’re interested in guesting posting at The Heavy Purse, please read our guidelines before submitting your request.

It’s been more years than I care to admit since I took that fateful walk across my college’s gymnasium stage to accept my hard-earned college degree. I was the first in my family to graduate from college, so it was a big deal with plenty family members there to cheer me on. This piece of paper signified my transition from kid to adult, and I was ready to be a “grown-up” and be on my own. While I was fortunate to graduate without student debt, I was far from being money smart or Financially Real.

Like most people, I made my share of mistakes, which is part of growing up, I think. Fortunately, I did not make any massive mistakes, but looking back, there are definitely a few things that I wish I knew when I graduated.

Understand How Credit Scores Affect Your Life.

Understanding money overall is something every graduate should learn, but I’m going to focus on credit scores because I had no idea what a credit score was or why I should care about mine when I graduated. I’m guessing many graduates are in the same boat. But everyone has a credit score and it does affect your life, perhaps more than you realized.

Most graduates leave college with two big goals:

  1. Find a place of their own.
  2. Find a good job.

Your credit card score influences your ability to do both. Both landlords and employers will likely run a credit check before leasing you an apartment or hiring you. This is why it’s critical to build and maintain an excellent credit score. Otherwise, you’re back to relying on your parents, which puts a real crimp on your “I’m a grown-up now” dreams.

To-Do: Educate yourself on credit scores and how they are calculated. Find out your credit score and review your credit history to ensure there are no errors.

Safety Tip: Parents — if you do have to co-sign a loan or lease, make sure you understand the risk to your own credit score and your responsibilities if your child defaults on a loan or breaks a lease. Additionally, you should strongly consider having a life insurance policy on your child because you will inherit co-signed debt should they die prematurely. I know we don’t like to imagine outliving our children, but it can and does happen.

Don’t YOLO through Life. Figure Out Your Priorities.

I definitely YOLOed after graduation for the first few years. I didn’t create debt, thankfully, but I ambled along with no real purpose with my life or money, living paycheck-to-paycheck and spending my money on whatever caught my fancy, like shoes. Lots and lots of shoes. I didn’t start setting goals until I was in my 30s and regret not starting earlier.

I spent mindlessly on lots of things I wanted in the moment, often as an emotional response to stress or boredom. Back then, it didn’t feel wrong or wasteful, but normal. It’s what everyone else was doing. My advice: Don’t be like everyone else. Instead, figure out what your priorities are and work towards achieving them. You’ll be much happier long-term and be well on your way to creating the life you want for yourself versus following the herd mindlessly. When I think about the money I wasted on dumb things and the things I would have rather done instead, my head aches and my savings account weeps.

Your To-Do: Set annual goals, both long-term and short-term. Make sure they are goals you want, rather than what others want for you. Review them regularly and it’s okay if your goals change along the way. The idea that goals were set in stone was another mental block that prevented me from setting goals. Don’t be like me and think changing a goal means failure. It doesn’t. Goals can and often do change.

Chose Your Circle of Friends Carefully

The people closest to you have a lot of influence on your life, financially, personally and professionally. It is often said that you mimic the behaviors of those closet to you, so pay attention to whom you let into your inner circle. You don’t have to be clones of one another, of course, but make sure they are people whose behaviors and attitudes are positive influences and bring out the best in you.

3 Types of Friends to Avoid

Most likely you have one or two friends who fall into the following categories:

The “Keep Up” Friend

This is the friend who encourages you to spend without care and mocks you for not “keeping up” with them. Real friends have enough self-awareness and consideration to recognize that pressuring you to “keep up” is not true friend behavior.

The Energy Vampire

This is the friend who saps you of your energy and your common sense with all their nonstop drama and/or negativity. Spend too much time with them and you may discover you lack the energy to follow your dreams or even stop pursuing your goals because you no longer believe in them, thanks to their naysaying ways.

The “Yes” Friend

This is the friend whose opinion is always your opinion. It might be nice to have someone constantly agree with you and validate your thinking, but real friends can provide constructive criticism in a loving and supportive manner.

This is a hard one because they likely have admirable traits too. In some instances, you can get by with just minimizing the amount of time you spend with them. Just always be mindful of how they can influence your spending and thinking, so you don’t start mimicking their less than becoming behaviors.

Live and Learn is My Motto

Hindsight is always 20/20, so while I wished I would have known these things when I graduated, I’m who I am today because of having to live through my mistakes too. Hopefully, you’ll learn from my mistakes and make different mistakes that you can teach the next generation to avoid. After all, part of being a grown-up is learning how to thrive, even when we make mistakes.

What advice would give you a college graduate? What do you wish you knew back then that you know now?

TanyaTanya is a freelance writer, web designer and blogger. You can find her at Eat Laugh Purr where she and her ginger tabby, Max, enjoy simple pleasures every day and at TV Fanatic reviewing Madam Secretary and more. Connect with Tanya on twitter and Pinterest. And please, no judgement on the number of cat pins I have.
May 29, 2015  •  17 Comments  •  College

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  1. Friday, May 29th, 2015
    All great suggestions Tanya! I had no clue what a credit score was when I graduated and it has become even more important since so many individuals (from insurance companies to rental agencies) look at our credit. My advice usually focuses around establishing some sort of plan for your money. That doesn't necessarily mean it has to be a budget, but some plan for your money so you know where it's going and what it's doing for you.
    • Sunday, May 31st, 2015
      So true, John. Credit scores are becoming increasingly important and it is easy to screw them up, unfortunately. Budgeting is definitely key. My early budgets was just making it paycheck to paycheck. :)
  2. Friday, May 29th, 2015
    I love this Tanya! I was a lot like you where I just kind of wandered aimlessly but it didn't seem bad…like I wasn't racking up thousands in debt, but I had no goals or too much regard for my future. I would advise a graduate that they don't have to be SO serious right after graduation, but if they put just a little away at a time they will be SO much better off later in life.
    • Sunday, May 31st, 2015
      Great advice, Tonya! You definitely can enjoy life and take care of business at the same time. Something I wish I understood earlier.
  3. Friday, May 29th, 2015
    I think understanding your credit score is a huge point. I was just talking to two high school seniors about the importance of building credit as soon as possible and they both had the misconception that credit was something they were to fear and they planned to avoid it as long as possible instead of building it responsibly from an early age.
    • Sunday, May 31st, 2015
      I didn't understand credit scores or credit cards and had some fears about the latter. Knowledge is definitely power and fear is not always the best teacher. Sometimes it just leads to a different set of mistakes.
  4. Friday, May 29th, 2015
    Great advice about friends. You really need to pick and choose your friends carefully after college. You will probably deal with enough "keep up" people in your job/career, so it's best to not be around them in your free time, too.
    • Sunday, May 31st, 2015
      Yes! You can't choose your coworkers but you can choose your friends. I want to spend my time with those whom bring out my best as I hope I do the same for them.
  5. Saturday, May 30th, 2015
    I completely agree with your explanation on friends. Choosing our circle of friends carefully can help us determine whether we achieve our goals. They can either help or hinder our goals. That's why I am kinda picky when it comes to choosing my friends. :D
    • Sunday, May 31st, 2015
      Good for you. Being choosy or selective with whom you spend your time with is smart. It's sort of amazing how much influence they have on us and our success.
  6. Sunday, May 31st, 2015
    I recently graduated from college a couple of years ago and I tend to be extremely careful not to splurge on lifestyle choices. I'm not a minimalist per se, but I prefer to have a conservative budget. I think as you mentioned it's important to choose your friends wisely, since if it's a mismatch, you're probably going to have a hard time managing your money.
    • Sunday, May 31st, 2015
      Very true - friends with different values when it comes to how you spend your money can make it tough to spend wisely. When I was younger I was definitely more concerned about keeping up, which happens to lots of young adults. The older I get, the less I feel the need to keep up.
  7. Tuesday, June 2nd, 2015
    It's also important for college graduates to understand how bad financial decisions now, could haunt them for years and years to come. If I could go back and talk to college graduate self, I would slap him upside the head and show him what he was about to do, and what effect it would have....
  8. Wednesday, June 3rd, 2015
    This is great information! I didn't understand how to manage student loans after graduation. I didn't know that I was able to request a deferment on my repayment due to economic hardship and instead allowed my account go into delinquent status after missing a couple of payments. This obviously caused a huge ding to my credit score, but I didn't understand the impact of that until a few years later when I was car shopping! Back then I also always carried a revolving balance on my credit card which was almost always maxed out. I was racking up more interest fees than I was paying off with the minimum payments each month. I'm happy to see that the Credit Card Act was passed back in 2009 to protect young consumers in school from sleazy credit card offers since this would've helped me. Though, I believe there needs to be a big push on personal finance education that starts in grade school.
  9. Monday, June 8th, 2015
    I've got to say, the friends piece is huge. It's so important to find other like-minded individuals. The saying is true - you're the product of the people you spend the most time with...
Shannon Ryan SHANNON RYAN, CFP®
  • Meet Shannon

    "As a Certified Financial Planner, it is my passion to help individuals and families build a healthy relationship with money. I look forward to helping you raise financially confident kids.” - Shannon Ryan
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