Hey everyone! Today’s post is all about different financial related skills, behaviors, etc. that young adults should know.
As a 24-year-old, there are many things that I wish I knew when I was just a little younger.
Yes, I know that I am young, but almost everyone has something in their lives that they wish they would have done just a little differently, right?
When I was applying for my first “real” job after college a little over three years ago, I always submitted a cover letter. I do think that this helped me land more job interviews.
However, I know of many people who when applying for jobs never attached a cover letter or never changed the “objective” section of their resume. They would just submit their resume to hundreds of companies in the area and would never get a call back. You are just wasting your time! You need to put in effort. This does matter.
Yes, I like to look nice every now and then, and so do others. You can buy a couple of “trendy” items, but you should be buying classic pieces that are quality. Buy things that you know you will wear, and don’t waste money on the rest. 10 years from now you most likely won’t be thinking about that awesome dress that you wore one time.
I am guilty of this. I went shopping the other day, but it was for the first time in what seemed like forever. I went on a non-official clothing spending fast without even realizing it. However, before I would spend hundreds of dollars on clothes each week without even thinking twice.
College is expensive. And I’m sure that there are different ways that you can pay for it, instead of entirely relying on student loans.
I finally eliminated my student loans in July of this year, which is awesome, but I did graduate from undergraduate school over three years ago. I do think that if I would have tried harder and not taken out so much to fund my shopping habits, that they could have been done much more quickly. I sure am happy though!
Many people do not fully understand credit scores and how to improve it. For example, surprisingly, many people think that just paying the minimum payment on debt with interest (such as a credit card) will actually pay off the debt quickly. NO! You should be paying more than the minimum payment, or you will be paying a lot in interest with each payment. Just paying $25 a month on a $1,000 credit card bill isn’t getting you anywhere.
Also, many do not know that carrying maxed out credit card is hurting them. Well, it is. And it’s decreasing your credit score.
Credit scores are important. Even if you think they are the devil, at one point in your life you may need it, and you can use your high credit score to your advantage. You can obtain low-interest rates (such as 0%). Or you can use your good credit score to get a mortgage with a low-interest rate.
Read more about a credit score and a credit report.
We bought our first home at the age of 20, and while I wouldn’t change a thing, sometimes the negatives of home ownership pop up. For example, just last night, we thought that we would fix a running toilet ourselves. Well, that went downhill really quickly and a water line burst and flooded our bathroom. We had to call an emergency plumber and that cost $225 for him to fix something that should have only cost us $20 if we would have done it correctly the first time.
If you need to rent your first, second or third place (or whatever for that matter), that is fine. Renting is not always throwing money away. If you rush to buy a house and hate it, you will likely be wasting much more money.
I am finally realizing this. Life does not have to be a race to the finish line. I finished with two undergraduate degrees by the age of 20, and then received my Finance MBA at 23, all while working full-time. I don’t know why I did this. Yes, I did have fun, but I often think about how much fun I would have had if I studied abroad or took summers off to really enjoy myself.
I am changing this now. I have some travel plans made, and want to make some more. We are thinking about long-term travel as well.
For us, we also like to have hobbies, and some of our hobbies include cars. Not everyone enjoys cars, but we truly do. We like our Wrangler, because it’s fun to drive around in, we like our Camaro because that’s of course fun also. We also have a classic truck, but we are going to sell it because we have been letting it deterioate, and any good car person should know not to let that happen. We would rather someone else enjoy it. If you’ve never had your license before, then getting temporary learner driver insurance from ILD is important just in case something happens while you are learning.
I don’t care how much money you make, a budget is always a good thing. If you’ve never ever had a budget and you have never saved a dime in your life, then a budget is needed. If you are not saving enough money then you should create a budget and see what needs to be eliminated.
I understand that not everyone wants to find passion in their jobs. Some just want to go to work, make a paycheck and go home. They only care about the money. However, I do think that there should be at least some sort of positive in the job that you have. Maybe if you don’t LOVE your job, it at least allows you to do what you love in your spare time – such as work on cars, travel, volunteer, etc. If you don’t know much about your company, research its Business Profiles before you partner with them.
Hey everyone! Happy Monday. I want to say thank you to everyone who left a comment on my post the other day about what percentage housing expenses are relative to your income.
I received a lot of great responses and hopefully it will help people determine if a house is right for them or not. So many people don’t realize that there is more to a house payment besides just the actual payment (mortgage, insurance, taxes, maintenance, etc.).
It seems like a hot topic in the personal finance community is whether a person should rent or buy a home. What if you’re not sure if a house is even right for you? Maybe an apartment would be better? There are many factors to think about before you buy a home.
When we were in the process of buying our first home, there were a lot of things to factor in. Yes, we were really young when we bought our house, we were 20 years old. Now, I don’t know if I would recommend buying this young for others. It has worked out for us, but we had to overcome many hurdles in order to get where we are.
We lived together for a couple of years before we decided to buy. We knew apartments weren’t for us (we have a big dog that we could never get rid of because she is my baby, and I lived in apartments nearly my whole life due to us constantly moving for my dad’s job).
My dad also preferred apartments/condos over a house with a yard because there were amenities (such as swimming pools and tennis courts) and he didn’t have to upkeep anything besides what was actually in the apartment. He enjoyed how carefree it was.
Also, W and I had rented a house together, and we knew what it was like to live in a house together. I knew for a fact that I did not want to live in an apartment or a condo. There is nothing wrong with condo living, different people enjoy different things.
Before we bought, I was tired of having no yard my whole life and something that wasn’t “mine.” I have moved a ton (when I was younger I went to a grand total of about 12 different schools), and I just wanted to stay put.
We knew we wanted a house, and the fact that houses were only slightly more expensive in our area definitely appealed to us.
However, we never really thought about how we would feel stuck if we bought a house. We were definitely thinking in the moment when we bought our house. We love our house of course, but I constantly wonder if I would be parading around the world if I didn’t have a house and so much STUFF.
Dreams of traveling extensively while we are young have definitely vanished due to us having to pay my mortgage. Oh well, that’s just the responsibility of growing up! I do love being a homeowner though.
Below are some questions to ask yourself before you buy:
Buying a house means that you will have a constant bill to pay (your mortgage payment of course). So a reliable job and income is definitely needed. If you are freelancing, you will want to make sure that you will have enough to pay your mortgage along with any surprise expenses that may pop up.
Of course, the same could be said about having an apartment as well. An income is needed wherever you decide to live.
If you plan on having kids and still staying the same house, then you definitely want to keep that in mind. However, if it’s just going to be 2 people in the house for a while, then do you really need a 3,500 square foot house?
Also, the general rule is that if you think that you will be living in the house for less than 5 years, that you should just rent instead. The costs of selling before 5 years usually outweigh renting. You will have many costs to pay if you sell, such as closing costs, realtor expenses, repairs, etc.
This is one reason why we regret buying a house (but we still do love having it). Being able to travel for a long period of time is not possible, because we do have to think about how we are going to pay our mortgage payment every month and I’m a paranoid person so I would be afraid of squatters ruining the house if we cannot find a reliable house-sitter.
However, I do plan on making the switch to self-employment soon and traveling at the same time, and we will be keeping the house. We will just have to make it work!
If you have a job/career that will require you to move a lot, then home ownership may not be for you. If you are moving every year, then home ownership will be way too expensive to justify the costs.
Yes, I realize that a lot of people view mortgages as the devil, but for most, owning a house without starting with a mortgage is near impossible. A better credit score (read my post on building credit) leads to a better interest rate, and therefore of course, a lower mortgage payment.
Also, a low credit score will lead you to not even being approved. Get approved before you start looking so that you’re not let down. No one wants to fall in love with a house only to find out that they can’t get approved for it.
We didn’t put down as much as we would’ve liked, and therefore, we have to pay PMI. For our next house I plan on putting a substantial amount down or paying in cash. PMI is so much money every month and I would rather not pay it. Getting home loans without PMI is always great!
This post was mentioned in a Carnival.
I always like help readers out, but I am not expert/professional, so that’s why I always enjoy publishing my reader question posts.
As teachers would always say in school “if one person has a question, multiple people most likely are wondering the same.” I know what it’s like to have a lot of student loan debt and feel as though you are stuck and extremely stressed.
Yes, I am out of student loan debt now, but it doesn’t mean that I have forgotten what it feels like. The stress can be unbearable. And when you look at your overall debt number, it can seem impossible. Getting help from others, such as all of you who will hopefully comment, can be a lifesaver. I prefer to learn from others and what others have done, so hopefully everyone can help out!
I’m a huge fan of your blog and read it religiously – I always appreciate the topics that you choose to write about, as well as the advice that you give your readers. I used to work at a local credit union and became completely obsessed with my finances and saving money. Unfortunately, after completing my nursing degree, I fell of the savings-bandwagon and am in debt with student loans, a maxed out credit card, and a personal loan.
I need some serious help with a budget, as well as advice on what I can do to make more money (as a new Licensed Practical Nurse, I don’t make very much hourly). I have the motivation, but not sure where to start!
This is what I said to her:
“Do you have a lot of free time? I would definitely suggest trying to find ways to make extra income. This can be writing online for websites, working at a retail store, babysitting and so on. So many people who are looking to get out of debt find jobs like these. The lack of free time might get annoying, but once you get out of debt you will be so much more relieved!”
She replied and said that she wants to get out of debt badly and that she has a good amount of free time. Her nursing hours are usually from 830-5 and she doesn’t work on the weekends. If anyone wants to help her in regards to budgeting, making more money, eliminating her loans and so on, please chime in.
I asked her to reply to comments as well (anonymously), so if you have any questions for her, please ask below.