If there was one thing that being broke in college taught us, it was the value of money. Since joining the workforce after graduation, we would like to think that we have learned a thing or two about financial responsibility. So when we do see our little sister, the subject of finances always seems to come up. It got us thinking, what would we tell our 20 year old selves about finances? What did we do right? What did we do wrong? What would we have done differently?
We got jobs to pay our rent and daily expenses.
College loan pay back seems so far away when you are busy enjoying the college experience. Assuming that most people dorm year 1 and that living expense is already a part of the loan amount, we will exclude that from this point. We are talking about years 2-4 (or 5 or 6) where living expenses can be covered out of pocket if one is willing to put in the work. We both had jobs through college, often working over 30 hours a week, and that allowed us to pay for our apartments and food costs out of pocket instead of through loans.
We consumed large amounts of ramen.
I am not speaking on the health benefits of ramen here, merely on the financial aspect. What ramen represents is the idea of keeping costs down by buying groceries and eating at home as much as possible. I get it, it’s college and you will end up going out to eat a lot , and that’s fine. This is more for those times when you have the choice to cook for yourself, or be lazy and buy something.
We did we do wrong?
We got credit cards.
It is actually pretty funny. I signed up for a credit card to get the free nerf basketball hoop they had on display at their kiosk (flights and nights are much better). The creditor banked on me somehow screwing up eventually and they were right. I was late on a couple of payments and that destroyed my credit score. Instead of spending my twenties racking up free travel, I spent it trying to turn my terrible score into a great score.
We did not save any money.
We went into college with a couple hundred dollars and we left college with about the same amount of money. The idea of saving money did not resonate with us yet.
What would we have done differently?
Get credit cards but...
I would have set it up for auto-payment in full every month up front. Anneli would have ignored the 0% APR for 12 months instead of using it as a green light for shopping. In short, we would have taken advantage of the benefits (basketball hoop and building credit) and we would have eliminated any chance of screwing things up.
We would have saved money.
The beauty of being broke is that you are used to not having any money. If we could do things over, we would have set aside a portion of each check for things like a 401K, Roth IRA, savings account, and/or investment account. Out of sight, out of mind. We do this now, and honestly you do not miss the money that you do not see.
We can’t be the only ones that have looked back on our college years and asked these questions. Am I the only one that was swayed by a basketball hoop? What were some of your successes and failures? What would you have done differently?