Editor’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.
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:
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.
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.
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.
Most likely you have one or two friends who fall into the following categories:
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.
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.
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.
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?
Tanya 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.
SHANNON RYAN, CFP®
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