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« Balancing Enjoying Your Money Now Versus Later | Main | How to Ask for a Discount When You're Embarrassed to Ask »

July 27, 2010


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1) If you're not already doing so, build your credit now. Having a good credit score will open all sorts of doors for you in the future.

2) Practice being efficient with your money -- keep expenses down by getting the most out of your money. If you have $25 to spend on entertainment, you can go to the movies 3 times (about 6 hours of fun), or buy a basketball and play pickup games at the park (maybe hundreds of hours of fun). You can subscribe to World of Warcraft for a couple months, or buy a video game you can play for a decade. I'm serious about that last point; I still play a 12-year-old video game with friends of mine online, and I know others who still have their SNES set up in the living room.

3) If you can find the financial room to do so, set up a Roth IRA for yourself, preferably through something like Vanguard. Any money you put into a Roth IRA becomes tax-free money down the road. If you make a habit of saving for retirement, you'll have an easier time keeping that habit up; if you neglect it now, it's hard to start later.

1) Whats your major?

Major in something that will pay your bills in the future. If you have a 'passion' for something that isn't a good money making career then consider a dual/double major combining your passion with something practical.

2) "I'm going to a private school"

Why? Is it a ivy league level school? Or some special school for some special program?

I know you already made the decision and probably don't want to change it but your #1 expense right now by far is the amount you're spending on your college bills. Private schools are significantly more expensive than public schools and you're paying 2/3 of it out of pocket.

Consider transfering to a good public school in your state.

3) Get one or more internships while you're in school. Its the best way to get useful work experience and get your foot in the door to get a good job at retirement.

There are several things you can do to begin saving, investing, etc. Some of those suggestings I am sure FMF passed along, and also LB above.

My biggest suggestion would be as follows, and follows a different line of thinking:

Whatever field you are studying for, and whatever career you believe you will pursue after college, do your absolute best to be the most qualified 22 or 23 year old you can be in that field after graduation. That means getting good grades, getting internships, networking with companies in that field as opportunities present themselves, joining and participating in clubs that are relavent to that field, etc.

I came out of college with maybe $5,000 in savings and no college debt (thanks to a variety of reasons, especially help from my parents). But the thing that has allowed me to achieve a decent amount of financial comfort in my 3 years since college graduation was to follow the advice I gave you above. At age 26, when it was announced 2 weeks ago that my employer was being acquired (by a company I do not want to work for), I had calls from 3 employers that very same day, and just yesterday accepted an offer from one of those companies that yielded a significant increase in pay and responsibility. They came looking for me, likely because of the following.

1. I got top grades in college
2. Due to solid grades, I was able to get 2 internships in my field during college. these internships also provided excellent networking opportunities.
3. Due to those internships and networking, I got into the very best company in my area in my field, who trained me very well.
4. Due to that training, a smaller, well respected company in my field came looking for me 10 months ago, and last week when they sold themselves...
5. Another employer came looking for me, which will provide me continued opportunities to grow my career.

To summarize all of my above thoughts:

Just realize that what you spend your time doing in college can have a very positive or negative effect on your future for years to come. Try to be very cognizant of that fact, and plan accordingly.

I think a key thing you can do is keep your expectations for *after* college in check. Presumably, once you graduate, you'll get a full-time job and discover the joy of full-time pay checks. If you really want a good start financially, you'll want to be able to resist the temptation to spend most of this new money. It's (relatively) easier to keep your spending in check while in college but after four years it's all to easy to say "well, I spent four years in a crappy dorm room -- I deserve to rent an apartment with granite countertops" (or whatever -- that just happens to be what I said).
The longer you can maintain your cheap college lifestyle after graduating, the better -- the money you invest during those first few years has the greatest long-term potential. Of course, you can (and should) slowly add some additional expenses into your lifestyle -- but slowly.

Basically, don't try to make a financially-prudent college lifestyle easier to accept by telling yourself that you'll make up for it after you graduate.

1. Get to know your professors within your major/field (or any other professor really) you want to enter into. They can help give you the heads up on interships and serve as good references for those internships. I got my first internship at a Big 6 accounting firm (it was 1998) due to my friendship with a history professor from my freshman year.

2. Help establish your credit. Make small purchases every month, maybe $50 or so, pay it off before the due date and establish a record of paying your bills monthly. If you can't do that, live on the cash method so you do not wreck your credit. It is not hard to have good credit. You can give yourself bad credit quickly and easily, and it will take years to fix it.

3. After school immediately start in with your employer's 401k. And when I say start, I mean 10% or more of your salary. You will have never earned a salary like the one you will be earning, therefore you will never know the difference if that 10% or more is not hitting your bank account. It doesn't hurt nearly as much when you do not feel it.

4. Like what was previously said, pick a major that will pay the bills. Make sure it is something you like, just make sure you can make a solid living in that field.

Good luck with school.

Pick your friends carefully--don't get caught up in how others spend their money. Try to find folks who are not spendthrifts; if not you may get caught up in a spending frenzy that you didn't mean to get into. All adivse that has been posted before is excellent. You're off to a good start--good luck!

#1 ------------- Get your future career right the first time.

Enjoy can be the one of the best phases in your life. For me it was a period where I was surrounded by the most brilliant people I have ever known both before and since.
Take some classes with horrible, difficult to get along with professors. Learning to get along with them will be useful when 15 years down the road you have 3 kids support and a boss who is a real jerk.
I have to maybe contradict some of the above commentators but I advise that you don't freak out when you blow a final. Some of the most successful people in the world graduated near the bottom of their class. Concentrate on learning to be comfortable in your own skin - if you aren't yet.

Read all the articles about recent grads who graduated from Ivy League schools with Poli Sci or History majors and with tons of debt and who can't find a job to save their lives- and then make sure your major will enable you to find gainful employment.

Unlike some others who have posted, my college years weren't a lot of fun- I majored in electrical engineering. But finding a high-paying job has always been relatively easy for me.

@Pop - I majored in EE and CS myself at an expensive school, worked plenty hard for my degrees, and have had one of those high-paying jobs for a couple years now. Where we differ, though, is that I've had a blast in college and since, because I really enjoy engineering. Lucky for me, right?

On the other hand, I had classmates who were miserable because they went into engineering for poor reasons (parents, money, pride...). A few of them came to the brink of emotional collapse under the stress. The smart ones then stepped back, changed life plans, and are living frugally and happily with humanities degrees on very modest incomes.

@OP - So, pay attention to what your likes and dislikes are telling you. As FMF said recently, you don't necessarily have to love your study/work. If you don't at least like it, though, choosing it for the money is not only a recipe for a sad life, but also very probably self-defeating.

Just the fact that your reading this blog means you are going to be way ahead of your peers. The biggest thing is do not get any credit card debt. Go ahead and get one if you can control your spending so that you establish some credit, but only use it for things you need and pay off the balance every month.

I was never fortunate enough to be a full time student and to enjoy campus life. My undergraduate courses were all taken during the evenings and the one day/week that was part of my 5-year engineering apprenticeship. My graduate days were spent in an early bird program that went from 7am-10am 3 days/week while I was fully employed. The plus was that my education cost me practically nothing and was directed totally towards my career - no liberal arts courses in my curriculum. I know how great it may be to be one of thos fully rounded people that know a little about a lot, but I have done very well knowing a lot about a little.
The other thing about my career was that there were no wrong turnings. My working life consisted of:
1) 1 year as a technical assistant for a company that made in-flight refuelling equipment.
2) 5 years as an engineering apprentice for a famous British aircraft company.
3) 2 years as an engineer for a Canadian subsidiary of another famous British aircraft company.
4) 2 years as an engineer for a small American company that made aircraft ejection seats.
5) 32 years as an engineer for America's largest aerospace & defense corporation.

I was lucky enough to never have a single day's unemployment and to retire with a nice pension and a 401K.
Thus my advice to this 18 year old is to make up your mind ASAP what you want to be and focus all of your effort on achieving that goal. I was always interested in airplanes, partly because the Royal Air Force saved the day for us against the German Luftwaffe during the Battle of Britain. I was an impressionable youngster that liked airplanes and was a member of the high school air cadets and was able to enjoy summer camps at airbases and ride in many WWII airplanes including an old DeHavilland Tiger Moth bi-plane and a Lancaster Bomber.
I must add that my whole career depended heavily upon the Cold War with the USSR, without that I would have had to find another career.

Don't buy into the myth that you can be rich by starting saving at a young age. When I was 16, I went to a financial seminar with a group of other people. I was the youngest person in the crowd. They ran some calculations and said because I have so much time to let my money grow, if I start saving just a little bit at a young age, I'll be rich fairly quickly - unlike the older people in the room.

The truth is that it is impossible to save when you are young because college costs more than whatever any normal teen could save. I am now 25 years old. Between age 16 and now, I went into debt to pay for college and had a negative net worth. I now have a positive net worth again, but I'm getting married in 2 months which will change things again because my wife has HUGE student loans. I'll have a negative net worth again just by getting married. It sucks.

So here is my advice - don't marry somebody with big student loan debt.

This is a great question that I'm sure many college freshmen struggle with. Here are my 4 key points.

1) Find a Co-op Job or Intership
2) Build a Fund to Pay Off the Loan
3) Get Involved on Campus
4) Work Hard

I wish I would have been smart enought to ask that question when I was 18. There are 3 things I would recommend to you:
1) Learn about Dave Ramsey's Baby Steps (you can read the Total Money Makeover) or Crown Financial Ministries Money Map (read Your Money Money Map by Howard Dayton) and start following them.
2) Save money. Even if it's just a little bit you want to build up your cash savings. Save consistently every month.
3) If you're taking on some debt to go to school start evaluating ways you can earn while in school. Perhaps it's a part-time job, running your own website, or other. But look to find ways in which you can build income streams. Use that money to pay for some of your school.

My 3 cents:
1. Start Your Credit History:
Apply for a low balance credit card, $500 to $1000.
Charge some of your tuition, fees, and school supplies on your credit and pay it off the whole balance when the bill comes in.
If you don’t qualify for a credit card, get a pre-paid credit card just to start building your credit. Stick to only one credit card.
Get your credit card with a local trust worthy financial institution, like not for profit credit union for student.

2. Get a Part-Time JOB:
Preferably related to your field of study.
On campus jobs gives you a ton of flexibly (also some slack) and you can make some pretty good friends with similar goals. Also, it’s easier to stay on top of what’s happening on campus.
Look into work-study programs, if available.
Save all extra cash (if any) for one of those “sucker punch” days (it come from nowhere).

3. Stay on Top of Your Game:
Keep up your GPA (avoid C’s, but move on quickly if you get them).
Do some research and join the most “prestigious” club in your field of study.
If you don’t want to join one of those “I got no life” clubs at least do some research and find out exactly what qualifications the employers in your field of study are looking for and what they expect for out of school rookies.
Be smart on picking your classes, every semester have one of those “easy” classes in the mix.
Get at least one internship.
You can attend on campus job fairs (recruitment events) just to get familiar with the companies recruiting at your school.

I think it's great that you are trying to make plans for your financial future now. Prior posts about living within your means, developing a credit history, getting good grades, and so are an excellent start. Trying to get a job or internship, preferably in your field of interest, is an excellent plan as well. Given a choice between somebody with good grades and proven work experience, and somebody with excellent grades and minimal work experience, most employers will weight the work experience more heavily. Internships are also a great way to network and see if this is really what you want to do after school. If it's not, now is the time to find out!

That said, don't lock yourself into a single plan too tightly. College can also be a time to take the occasional class just because it is interesting or expands your view of the world. It can be an opportunity to try different activities and interact with people from a variety of backgrounds that you might not cross paths with otherwise. An ability to communicate clearly and appropriately to any audience, and to think outside of your own tiny box in the business are skills that everyone needs to develop to succeed in their careers in addition to the technical skills, and it doesn't hurt to start on them now.

Few people follow a straight line for a career path any more, and adaptable skills will carry you further in the long run than just having the right technical skills. The technical skills might get you the first job, but proving you can do more than just accounting (for ex.) is what will make a company interested in training you further or promoting you.

-Set up a regular savings plan to put aside money BEFORE you start spending it
-If you get a credit card, use it like a debit card and only but what you can afford pay for in full
-Look outside your major for jobs if you can't find a job you like
-Don't give up on your dreams, regardless of the financial ramifications!

All good advice so far. I would strongly suggest that you look for ways to earn while in school. If you can get a paid internship, that would be best.

Start your network now. How? Go to parties and be social! I got my first and a good paying job through a friend who was a year ahead of me and was in my major. Be social with people in grades above you, it helps.

The point about friends is also a good one. Make sure that you are hanging with smart, driven, fun, ambitious people. It will rub off.

Consider a minor/concentration/double major. At many schools you can do this for free. It might give you 2x as many options for careers and an oportunity to specialize. A future business writer might double in journalism and economics.

Choose broad majors with many options for proven entry into your chosen field. Plan your classes so you can take them and graduate on time.

Study abroad!!!! As much as you can!!! It is a great way to see the world while it is an accepted time. A european vacation might cost thousands and can be too expensive later in life. Go abroad and get college credit? Great idea!! Also gives you instant life experience to talk about.

I'm 23, and the one decision I messed up wasn't obviously financal. take care of your health in college... avoid spending money on fixing the health issues later. otherwise, keep track of your general spending, don't go overboard on concert tickets and other fun stuff, and you should be fine.

At your age, keep it simple:

(1) Savings: Have a savings account. Likely you'll need your summer earnings to pay for school, but try to sock away 5-10% of everything you earn toward the "Big Opportunity" of your dreams.
(2) Credit: if the card comes with a free t-shirt or ipod nano, RUN AWAY. Find a way to join a credit union, and get your first card from them. If you can wait until you're a junior, you still have adequate time to start building a credit history before you have to find an apartment post-graduation.

(3) Learn to cook. You'll save a fortune over your lifetime AND it impresses girls.
(4) Learn to accept living with roommates. Do it for the first 2-3 years after graduation.

(5) Get great grades. You'll open up options to tutor classmates ($20/hour cash, depending on your area) and be eligible for top internships.
(6) Get at least one corporate internship. Yea, the massive corporation isn't as cool as the local company, but depending on your grades and your major, it might cover relocation expenses, corporate housing, a decent wage, and social outings. I had NO idea the perks were this good (I'm a grad intern now). Plus, a brand name people recognize gets your resume thru the HR pile much more than an unrecognizable one will, even with the same actual work content.
(7) Be selective about who you friend on social networking sites. Big companies DO check this stuff. Also, don't post negative things...people are more likely to refer you for opportunities if you're perceived as upbeat and happy.
(8) Get or stay in shape. It affects the impression you leave on everyone, and does show up in your paycheck. Good-looking, fit people get paid more and promoted more. Harsh, yea, but true.

DON'T TAKE OUT ANY STUDENT LOANS OR GET CREDIT CARDS!! You can work & pay your way thru school...people do it all the time & if you graduate debt free, that "beginner" salary will can go to Roth IRA's & retirement accounts or buying a home. Not to pay back student loans & credit cards-- which probably just paid for pizza & clothes & frivoulous trips.

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