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5 Pieces of Financial Advice I got when I was going to college that I still think are pretty useful

Financial advice I got when I was 18 that I wish more people knew. US edition, because a lot of this is country-specific advice. TL:DR; be smart about how you save AND spend your money.


The very first time I laid eyes on Boston I knew I wanted to go to school there. To the imminent protest of my own wallet lol.


When I was in college I read Rich Dad, Poor Dad, which made me LOL from the very start because the whole premise is way too similar to my own life. Except it was my step-dad who taught me finance, not my friend's dad. At any rate, it's an older book so some of it has aged like milk, but most of it is still solid advice... definitely not really meant with young people in mind though. The logic is still very sound, even if most of it is inaccessible to be applied at that age, so it's still worth a read!


Anyway, it made me feel very humbled to know a great deal of it were lessons I'd already been taught as a teenager by my extremely financially sound step-dad, but also made me realize a lot of my friends at the time never even gave their personal finances a thought, and without books like this out there it might never even cross their minds. It's really just not taught at all in schools, unless you're specifically aiming for a business major. Nowadays with r/stocks so big online and kids getting into more e-commerce it does seem like learning about personal finance is becoming more popular, but it's still only a thing you get into if you're already interested in learning about it. I went to a family cookout and talked with a couple of my little cousins, some of whom were very into investing, and others who could care less.


This was my (only slightly!) unsolicited advice for the ones who weren't really into it. No I'm not cool enough to get paid for links, this is all my personal opinion and I don't make any money off of one product or another.


Invest, even if it's not a lot, that's fine

I always ran a gamut of odd jobs during high school and college. Luckily I only ever had to worry about pocket money, although I was also expected to pay my car insurance as part of the deal for getting to drive my car. But even then it never felt like enough when I was going to a pricey out-of-state university filled with kids who had the luxury of not caring about the price tag. I could barely afford to keep up with a social life, where was I going to get money to do something like invest? And all the stocks my step-dad told me to buy were way out of my price range (and yes, hindsight is twenty-twenty and I kick myself for not just saving up for them now).


My compromise was to sign myself up for Acorns. It's an app that invests your spare change whenever you buy thinks on your credit or debit cards. You link your cards, and Acorns scans your purchases and rounds up to the nearest dollar, investing the difference. You barely even notice it. It does have a $3 fee per month though, so I did use their recurring deposit feature to invest $5 a week to offset that. $20 a month + spare change was doable even as a college freshmen mostly subsisting off of meal plans and stealing food out of ziploc bags from the dining hall.


You're never too young for a Roth IRA

Just like with investing, it pays to start early, but it also seems like a chicken-egg scenario because brokerage accounts usually require a minimum to start an IRA. They're also confusing as hell, because you can have multiple of them with different brokerage services and lose track of them (I am guilty of this!!) and forget what went where or even if you hit your maximum contribution limit. Which was definitely not an issue for college-student me lol having 6.5k at all was absurd, let alone having that much to put into an IRA.


Anyway, again, Acorns has Acorns Later that lets you put a measly $5 per week away towards your IRA, which saves you from the issue of having to have 5k on hand to fork over to start an account. To be fair, they are not the only one in the market these days that lets you open for free with no minimum deposit. Fidelity constantly runs some pretty nice promos to open an account with them, like matching a $100 investment with $50, and things like that. But I still adore Acorns because their app interface is smooth and unbeatable, and if I'm paying the $3 anyways for Acorns Invest I may as well take advantage of their IRA offering while I'm at it.


Debit cards are a necessary evil, only use them as much as needed

This is probably a hot take lol but debit cards are necessary but also functionally worthless. Another hot take, but I also think cash is worthless. Why? Because it's money that's not making you anything by holding on to it. You put your money in an investment account, even an amount as low as $100, and it's making you something. It might be pennies on the dollar, but it's still growing. Cash makes you nothing, and debit accounts are only marginally better.


Of course, cash and debit cards are necessary - debit accounts more than cash these days IMO, but that's neither here nor there. You do need to have a bit of cash 'on hand' for various expenses, but the trick is to have only enough to cover those and park the rest somewhere else where you actually can get some returns on your money, like an investment account, an IRA, bonds, CDs, whatever. But once your money's in a place like that, it's usually there to stay, making it inaccessible for the near future.


Everyone's heard of an emergency fund. They are very necessary. But they shouldn't be in your debit account, they should be in a HYSA (High Yield Savings Account). A HYSA keeps that money flexible while still offering you a reasonable return. A lot of banks offer HYSA's in addition to debit accounts, they're easy to open and don't always require a minimum deposit. Transferring money from a savings account to a debit is also an easy process, especially so if you use the same bank for both, but savings accounts usually have a limit on how many times you can withdraw from them per month, so that's definitely something to keep in mind.


Avoiding debit card overdraft fees is also important to keep in mind. Not all debit accounts charge overdraft fees, some let you automatically set up a withdrawal from your savings if an overdraft happens, some decline them automatically, it just depends. Always check fees for accounts!


Don't be scared of credit cards, but don't be stupid either

My little cousin was terrified of credit card debt - rightfully so, but in this day and age building a credit score is important, and not as scary as it sounds. The real trick is figuring out the right credit card to get - it's a bigger decision than people make it out to be. Credit score is impacted by the age of your oldest credit card, so closing out your first card because you signed up for one with an unreasonable fee and didn't realize it because they gave you a 0% APR Introductory year can be a tedious mistake to fix.


As my cousin was very interested in traveling the way I do (with points lol) I pointed her in the direction of a Chase Freedom Flex card. It has no annual fee and ties in with their Ultimate Rewards Program, which is the program I use to travel. It's low-hanging fruit as far as travel cards go, but it does have a cool 5x points rotating category system that racks up points even at low spending. It also maxes out at $500 a month, which is supremely low for a regular adult but great for a soon-to-be college freshmen worried about maxing out a credit card.


There are plenty of other rewards programs, or even brand exclusive cards to choose from, although a great deal of the branded ones have annual fees, which I told her to avoid with vehemence, especially since this is a card she'll have to keep around for a few years.


Be smart about how you spend. Be *that* person on Venmo

So you chose a credit card that gives you some kind of benefit. Maybe it's points focused, maybe it's cash back (they're usually the same thing). But to get those benefits, you need to use the card. Putting your spending on a credit card puts your spending habits to work in the same way putting your money into an IRA or an investing account puts your savings to work. This is not an excuse to go out and spend money you were never intending to spend, just a way to think thoughtfully about how you buy the things you were already going to purchase.


When I go out with friends I am always that person who puts my card down and just tells everyone to venmo me, or purchases all our concert tickets in advance for us, or calls the Uber when we're going out. This does mean you have to trust your friends to actually pay you back, or otherwise you eat that cost, so I don't recommend this with people you don't trust.


I also never buy things with cash / debit card unless I absolutely must. Why would I? I get 1.5% cash back if I put it on my card - that's money I'm leaving on the table otherwise. It's actually way worse than that, because prices at the store are already inflated to account for the fees credit card companies charge businesses. Visa, Mastercard, Discover - they all charge merchants' fees to accept their cards as payment, something to the tune of 3%. Merchants then turn around and push that cost onto the consumer. If you pay with cash, you're eating that fee plus what you missed out on from your own card.


TL:DR;

Money is such an overlooked part of life and it is low-key a crime that handling personal finances is not only not taught in schools, but considered uncouth to discuss at all. I am so far from an expert it's hilarious, but at least I'm not afraid to discuss it... even if I did get a side-eye from one of my Aunts 😂

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