that I wish someone would have told me.
During my 27 years of life, I feel like I’ve made enough mistakes financially to be able to warn others and share what I’ve learned from those mistakes. Recently I came across a post on Tumblr that said:
And I felt that wholeheartedly, because if I wouldn’t have fumbled and fucked up a few bags, I wouldn’t be on the journey that I am now towards living debt-free. I would still be out here spending money like crazy. If you remember from my Why I Quit Blogging post back in June, I mentioned how I was living that “fuck it, I’ll get paid again lifestyle”, which is one of the most toxic ways of thinking about money.
Sometimes, I feel like my 12 years of schooling really failed me (1st-12th grade). Instead of learning about irrelevant course subjects, me and my fellow classmates should’ve been learning more about financial literacy. Unfortunately, my parents did not have any good knowledge to pass onto me either. I only knew how to somewhat “save” money. I learned nothing about ways to invest and generate wealth, only how to borrow money and incur debt. But one great thing about millennials is that we are learning from our parents mistakes and mis-education. WE ARE the generation that is taking the steps towards creating generational wealth for ourselves and future families.
Here are some things that I wish someone would have told me that could have saved me thousands of dollars and a hell of a lot of stress and suffering.
Get Your Associates Degree First
First of all, I just want to say how bad I feel for people who have taken out nearly $100k in student loans to pay for medical or law school and end up not even liking it. That’s why going to community college first is so important or taking a gap year to figure things out and actually have time to develop a passion first.
I started out at a community college completely funded by financial aid but I felt it was taking too long and I wanted a career, faster. So, my family suggested that I try Medical Assistant school because in their words: “healthcare is where the money is”. Unbeknownst to me, withdrawing from my classes at community college caused me to owe back thousands of dollars plus the additional school loan I had to take out to afford Medical Assistant school. It took me 7 years to pay off my student loan debts.
And now, here I am after changing my major a dozen times, switching schools, no associates degree, I’m currently a sophomore student at a 4-year university, pursuing a bachelors in a whole different career field not related to healthcare while struggling to afford it because I absolutely refuse to get back into student loan debt. Which means, graduating will take a little longer and I’ll be spending more money out of pocket.
Start Your Retirement Savings as Soon as You Get Your First Job
I probably didn’t figured out what an IRA and a 401k were till about a year or two ago and I’m still trying to learn more about both to this day. I’ve been working since I was 17 and I’m now 27. So I lost out on 10 years of retirement savings so far. I don’t know about you but I’m not trying to work till I die. I don’t want to be pushing 70 years old still clocking in at a job, which a lot of seniors are and it’s so sad to see. Some literally can’t afford to retire comfortably.
Build an Emergency Fund
If this pandemic didn’t teach me anything it definitely taught me the importance of having an emergency fund especially in the event of losing your job. According to research aka Google, we should be saving at least 6 months of our basic living expenses or 3 months if you are salaried. Guess how much I had saved when I lost my job? I’ll give you a hint, it’s the number before 1.
It’s recommended that we try to allocate 20% of our net income to an emergency fund, make IRA contributions to a mutual fund account, and invest in the stock market.
Learn How to Properly Do Your Taxes
Cause babyyy, you do not want Uncle Sam and the federal government on yo’ ass. They will harass you, garnish your wages, criminally charge you for unpaid and non-filed taxes, force you into bankruptcy, and some more stuff I don’t even want to know. Luckily, I never experienced any of that but I did have to owe back $1400 this year just because I misunderstood a question on my tax form. Yikes.
Maintain a Good Credit Score
Who knew three numbers could hold so much power. If you don’t know what your credit score is just go ahead and click THIS link, find out, then come back. I’ll wait.
Credit Score Ranges
- Excellent: 750 to 850
- Good: 700 to 749
- Fair: 650 to 699
- Poor: 550 to 649
- Very poor: 300 to 549
Having a good credit score is important if you ever want to buy a home, rent an apartment, buy a car, start a business (if you’ll need a loan), get better insurance rates, a cell-phone contract, and even getting a job because many companies do background checks during the hiring process. So basically if you ever really want anything, you’ll need a good credit score.
Now what I didn’t know was how certain things could affect your score. For example, making late loan payments, when you take out an expensive loan amount, when you authorize companies like car dealerships to do a credit inquiry, and when you max out credit cards. Please be aware of credit cards. I only have one with a reasonable limit amount, that’s it, that’s all I need.
Live Below Your Means
Ever heard the saying: “Trying to keep up with the joneses”?. Some people will be wearing the latest, most fly gear but be sleeping on an air mattress with two fitted sheets as comforters. Peoples priorities be all screwed up. Just because you get a new job with a little higher salary does not mean it’s smart to start ballin’ out and splurging on materialistic things. Have you noticed how some of the richest people in the world don’t even look rich? some of them wear basic clothing and drive older cars. You can be sitting right next to a billionaire and not even know it, that’s how discreet I wanna be.
“You know, white people get money, don’t spend it, or maybe they get money, buy a business. I’d rather buy 80 gold chains and go ignorant.” – Kanye West. (lyrics from “Clique” by Kanye West, Jay-Z, and Big Sean)
For example, if you go to rent an apartment you should never try to pay your max (the highest amount you can afford on rent), always try to pay $100-$200 below your means so you can enjoy your money more and spend on other important things. Opt for less amenities, lower cellphone plans, live with roommates or stay at home with your parents as long as you can, carpool, take public transit, share a car, shop more sustainably-go thrifting, do your own manicures and pedicures sometimes, set budgets, and cook meals at home rather than eating out all the time.
And, “If you can’t buy it twice, you can’t afford it” which means, put it back on the shelf sir/ma’am. Stop trying to impress broke people by trying to prove that you’re not broke because nobody really cares. If you’re out here flaunting money that’s the perfect way to get yourself set up in a really bad way. You don’t need to buy everything just because you can.
NEVER Ever Buy a Brand New Car
I saved the biggest bag fumble for last. I almost don’t even want to talk about it cause I’m still healing from this one haha. This is also a perfect example of why you should always live below your means cause you never know when your situation might change and how many other debts you have. Unless you can pay straight cash, you don’t need a brand new car. I’m currently ‘under water’ in my 2019 Honda Accord Sport 2.0T. It’s a beautiful car fully loaded with all the latest features that I didn’t need. I cannot wait to most likely sell it next year.
I decided to trade in my 2008 Ford Focus for this new car and I would do anything to turn back the hands of time to stop myself from making this dumb ass mistake. I had finally owned my last car and it was amazing not having payments anymore but I just had to have a new car. My Ford Focus constantly kept breaking down and I had just accepted a new job that was pretty far away from home so I felt like my car wouldn’t make it. Not knowing that I would lose that job less than a year after buying that new car.
Well, that’s all I got for now. As you can see, you live and you learn. I will always say that I’m grateful to have made these mistakes now in my 20’s and learn from them rather than be in my 30’s and 40’s still making the same mistakes. I’ve cried, I’ve beat myself up, and I’ve resented other people over the years for my financial mishaps, but at the end of the day it’s my life and I have to be the one to fix it and acquire knowledge on my own in order to share my wisdom with others. Hopefully this post reached someone and it stopped them from making a large unnecessary purchase. If you reach one person, you reach them all.
Till next time!