The Truth of Credit

How much debt do you still carry around from your college days? Be it credit cards or students loans, most people start out their financial life way behind and are in a constant state of catch up. When you are in college, you have a very optimistic view of the world; you think you can always get a good job and pay things off. Personally, I have no problem with that thinking, in fact, it’s sound, but there are some very common things that can happen that will throw a wrench in your plans:

1. You are going to want your own place – Once you get out of school you’re not going to want to live in your parent’s home anymore. Therefore, a major portion of your new paycheck is going to go to the rent or mortgage. My advice is simple, stay at home as long as you can stand it. If you thought the stress of finals was bad just wait until you have rent due and you don’t have the money.

2.You are going to want a new car - Sooner or later you are going to realize that a car is one of, if not the worst investments you can make. It’s best to learn that now instead ofthe hard way. However, if you are driving a piece of crap that needs repairs every three weeks then maybe you should bite the bullet. The point is, don’t be quick to go buy a new Lexus when your current car can still be used for a few more years.

3. You are going to want to travel or have a great social life – This is where you can really get burned. Please save up for the trips to Las Vegas or the Jersey shore, don’t putthem on credit cards. One rule I’d like to suggest to all of you, is that when you go drinking with the boys/girls make sure to take your credit cards out of your wallet. Just like drivingdrunk isn’t wise neither is debting while intoxicated.  Do you really want to pay 20% interest for a round of shots?

In the future, all of these thoughts will be ringing true in your head one way or another. The question will be how you handle them. My promise to you is this, if you can learn financial discipline early it will become almost automatic for the rest of your life. The bottom line is to watch the decisions you make as opposed to saying “F–k it, I’ll pay it next month.” Learn it here now, instead of the hard way.