We’ve all wondered, why did I learn trigonometry in high school, but not how to do my taxes? Maybe you learned how to write a check, but did you learn how to save for retirement? As graduation season is upon us, here are a few things I wish I had known about personal finance before graduating.
There is more to college costs than tuition and housing.
a first-generation college student, I simply had no idea what I was getting myself into when I enrolled and signed on for that first student loan. I thought that all I had to worry about was my tuition, fees, and on-campus housing bill. But textbooks, basketball game tickets, quick lunches on campus, t-shirts for every activity, and all the coffee I needed added up in no time at all. So did great opportunities like volunteer trips, academic conferences, and studying abroad. It all motivated me to create a monthly budget and plan to live within my means.
I needed a budget.
I didn’t really understand the need for a monthly budget until my bank account kept dipping dangerously low. Budgeting can sound boring and confining, especially when you’re a young adult new to spending money however you want, and I definitely didn’t have fun making my first budget and realizing just how tight the money was. After a while, I actually found budgeting gave me freedom to breathe and reduced my stress. I wasn’t worried about overspending and going into the red because I knew how much I could spend.
I did not need that credit card.
Many people like to utilize credit cards to help build good credit and take advantage of various rewards. However, I don’t think I needed one when I was learning how to spend my own money for the first time. When that first credit card offer came through, I thought my money problems were solved! I knew I’d have to pay it off one day but it came with zero-percent interest for a year, so I thought I could just deal with that in the future. But I didn’t pay it off before interest set in, and then it was quite the mountain to climb. It’s common for credit card companies to target young adults and college students, so consider those offers with a critical eye and a look toward the future.
It’s never too early to start thinking about the future.
It wasn’t until I was sitting down for orientation at my full-time job that I started thinking about saving for retirement. Being fresh out of college, I was mostly concerned with building my emergency savings and tackling my credit card and student loan debt; it was hard to comprehend also taking money out of my budget to save for the future. But I am so glad I took those first steps to save, contributing enough to my 401k to receive the full match offered by my employer, and eventually I found blooom to manage my account. Making small choices early on in my career helped set me up for financial success in the future.
About the author:
Miranda Wagner is the Business Data Analyst at blooom. She gets to use data to help blooom better serve our clients every day.
Published on May 17, 2021