Growing up doesn't have to mean constant stress and worry. It can look like gently preparing yourself, for all that is to come, in the form of financial security and awareness. Keep reading to find out 18 money lessons I wish I knew before turning 18.
Theres a sense of security that comes with having your own money. I experienced this feeling at a young age and even if my savings only had $86 dollars, I knew it was mine.
I felt completely prepared for the glitz and glam of adulting until I turned 18, and learned the hard way that the way books and movies told the story of life wasn't true.
Keep reading to find out 18 things regarding finances I wish I knew by the age of 18 that would have made my transition into the real world easier.
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1. It's never to early to think longterm
Money is something that you need to thrive in the world. And while money does not buy happiness, it makes life more comfortable. You're now presented with the beautiful opportunity to create the business you want and help people who are in need.
Thinking ahead helps to develop a sense of financial responsibility. You know you "need" the money to pay for your Netflix subscription so it's best to save some of your earnings.
Care about your credit
Consider making your first credit card a secured credit card. It shows on your credit report but your credit limit is usually the amount that you deposit. It's a lot harder to go into critical debt when you only have a credit limit of $200.
Consider different career paths
I've felt the panic of deciding between practical jobs and other things that I enjoyed doing, like writing or lending a helping hand.
It was as if I had to choose between living comfortably and figuring out where my next check would come from. Have a plan D, so that you are a tinsy bit more prepared no matter how the wind blows.
Chances are by 18 you will not have your entire life mapped out and that is perfectly okay.
2. Not all of your financial goals have to be public
You don't have to tell anyone what you're saving for. When you're younger, with goals and aspirations that are untouched by the chaos of the world, those in your inner circle may try to discourage you.
But knowing that you have a goal in mind, that you are passively (or actively), saving for helps you to keep doing it.
3. Your goals will change
You might think that saving for a car for when you're 16 is the best option, and realize that if you want to go to college, you'll have to cover the tuition bill. For many newly graduated high schoolers of 2020 this is the case.
If you are more free spirited you could decide to use that money to travel and explore after high school is finished.
4. College will cost money
The application fee is not free unless you are granted a fee waiver. Tuition itself will can cost anywhere from $210 per credit all the way up to a debt filled $81,000 per school year for some of the most expensive colleges in America.
Had I not qualified for FAFSA and TAP, a form of financial aid granted to students, I would have taken out a student loan before I knew the first thing about borrowing money.
Educating myself on student loans was not on my to-do list during senior year.
5. Avoid big loans
If you've read any of my previous post you may remember that for awhile NYU was my dream college. And the only thing I knew as I prepared to apply was that my tour visit was nice.
By now, although only a junior [in a different college], at NYU I would be over $100k in debt and preparing to take out another loan for the Fall 2021 semester.
With jobs not being guaranteed in various fields, it is an even riskier move to take out a massive loan with no clear way for paying it back.
6. Graduate school is more expensive
Anyone interested in the medical, teaching, or mental health field knows that graduate school is in your future. When deciding if graduate school is the right move you want to factor in cost.
You can make your education worth wild anywhere you go, avoid placing yourself in a huge rabbit whole of debt, stress, and bills when other schools have your program.
7. An emergency fund is essential
Having an emergency fund is for what you consider an emergency. The turmoil in your life may be buying your partner a gift because you don't have a job. It could be taking your pet for an uninsured checkup. Or it could be helping your family when money is tight around the house.
The point is that you get to decide.
An emergency fund is money put aside for when disaster strikes.
Even if it's only 5 crisp 100 dollar bills it's important to know that it's there and it's yours.
8. A sinking fund makes life easier
A sinking fund is used for expenses that are reoccurring.
If you don't have a lot of money to begin with it's nice to know you saved money for the rainy day you knew was coming.
9. Don't buy things to fit in with others
There isn't one purchase I made while in high school that has benefited me once I graduated. Trends die down fast. But if you must buy something, at least make sure it's something you like and will enjoy as well.
10. Working can feel endless
Once you get your first paycheck you recognize the freedom that having money gives you. You don't need an allowance to go out with your friends, plan for the future, or to save your own money.
But with that freedom comes another big step into the adult world because chances are, you'll become unwilling to give up your new source of income.
Having a work life balance is the key to reducing stress and ensuring that you have proper boundaries set up.
11. Sick days and vacation time are a thing
I worked over a year at my job before I realized that I had benefits that were renewed each time the budget was set.
Even though you are a part-time or seasonal worker you want to double check what benefits your job is giving you. There could be rights and perks to working that you may not even be aware off.
12. Apartments need more than rent money
Prepare to live within your means because an apartment is more than simply, paying rent.
It also means planning for furniture, groceries every week, light bills, even heat in some cases. Plus you want to be able to go about your daily life without all of your money going into the house.
13. Your first car may be used
"I want a car by 16" usually means something bright, fast, and shiny but your first car may just be on its last wing and a prayer.
But all hope is not lost, with time and effective money saving tips you will get a new one in no time.
14. Dates do not have to be expensive
The Cheesecake Factory is a great date if you're into a romantic, noodle, and cake filled night. But a day featuring Chinese food and a movie can be spectacular as well. It's about who you're with and not how much you can spend.
15. Holidays are not about outdoing the previous year
I had savings, a small amount of bills, and I was finally able to buy exactly what everyone wanted for Christmas. The next year my finances looked a bit different and I found myself comparing and judging my inability to buy expensive gifts.
But take a second a think about the last few holidays, do you remember every gift that someone gave you and if Thanksgiving on a budget was any different? Or do you remember if that day was special and memorable?
Odds are you remember the jist of the day and not the add ons that we fixate on.
16. Treating yourself can also look like saving money
You can pay yourself first and begin saving for your future. Having zero funds left over as you give your time to a job is not the goal. Yes, a new pair of shoes feels nice, and you should splurge on occasion and invest in yourself. But make sure you are building a comfy savings to fall back on.
17. Saying no to plans is a form of self care
After awhile my friends and I began to have different personalities and ideas of fun. As awkward and uncomfortable as saying no can feel, it's necessary to do it.
You can set boundaries in every area of your life and put yourself first, even when it feels foreign. You aren't a bad friend, partner, or family member because you decline to do something.
18. Self care can be free
Self care helps to build self love through work and dedication to becoming a better person. A hot bath where you're mindful of how the water cascades down your shoulders and spine, how the chill from the air makes the hair on your arms stand up, and how the day slowly washes down the drain, can be immensely satisfying.
Self care is making time for yourself. It can look like journaling your thoughts on paper, being aware of your feelings but not surpassing, cleaning to declutter your room, and potentially even find items to donate or sell.
Self care is being kind to yourself despite your circumstances.
In conclusion, if you are 18, in your twenties, or way past 30 you have the potential to make your life something worth living. It is never too late to advance and become the person you wish you were at 18.
I believe in you.
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