Whenever I take a walk down Memory Lane and think about my
college days, I'm swamped with images of late-night study sessions, raucous
parties, and last-minute essays. But what often pops into my mind – and leaves
a bitter aftertaste – is my financial naïveté back then. Now, with a few more
years (and financial mistakes) under my belt, there are some personal finance
lessons I deeply wish I'd picked up along with my diploma. Here are the top
four:
- Credit
Cards: Friend or Foe?
- What
I Thought Then: Wow! A credit card? It's like free money. Swipe now,
and worry about it later.
- What
I Know Now: Credit cards are tools, not lifelines. Yes, they're
beneficial for building credit, but they're treacherous if mismanaged.
The interest accumulates faster than you'd think, and before you know it,
you're sinking in debt. I wish I had learned to treat credit cards with
the same gravitas as a loan, because, in essence, that's what they are.
Paying the full balance monthly and keeping my utilization low would have
saved me a lot of sleepless nights.
- The
Magic of Compound Interest
- What
I Thought Then: Investing is for adults with six-figure salaries and
fancy suits.
- What
I Know Now: The earlier you start investing, even if it’s just a
small amount, the more you stand to gain. Thanks to the magic of compound
interest, money grows over time. If I had started investing just a tiny
portion of my college part-time job earnings, by now it would've grown
significantly. Plus, investing isn’t just for the Wall Street wizards;
platforms and apps have made it accessible for everyone.
- Emergency
Funds are Not Optional
- What
I Thought Then: I’m young. What’s the worst that could happen? If
something does, I'll just ask my folks or dive into my savings.
- What
I Know Now: Unexpected events are, well, unexpected. Whether it's a
sudden car breakdown, medical emergencies, or job loss, life is full of
unpredictable twists. Relying on parents isn't always feasible, and
digging into your core savings can set you back on long-term goals. An
emergency fund acts as a financial cushion, ensuring stability during
turbulent times.
- Budgeting
is Cool, Not Constrictive
- What
I Thought Then: Budgets are for those who can't have fun. I just go
with the flow.
- What
I Know Now: While 'going with the flow' sounds breezy and carefree,
it often leads to a rude awakening at the end of the month. Budgeting
doesn't mean cutting fun; it's about being aware of your financial
situation, prioritizing spending, and ensuring you have enough for what
truly matters. Had I adopted a simple budgeting system in college, I
would have avoided countless overdrawn accounts and that perpetual
feeling of being broke.
In a nutshell, college taught me a lot about my field of
study and life in general, but I often wish Personal Finance 101 was a
mandatory course. Nevertheless, the lessons I've learned through trial and
error have shaped my financial perspective. For those still in college or
recently graduated, it's never too late to get a handle on your finances. Trust
me, future you will thank you.
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financial blunders of their college days!
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