10 Things I Wish I Knew About Money at 18 – What mistakes did you make as a young adult with money? I’ve got a list you need to share…
I like to think that we all made some regrettable mistakes as young adults. Life if open in front of us and suddenly we have no one to reign us back in. We’re running into this new world yelling “FREEDOM!” as we have NO idea the trouble we’re getting ourselves into.
At 18, there are so many things that I already knew about money, like “a penny saved is a penny earned.” But that’s about where it stopped! No one taught me about retirement or about credit cards or debt. There were so many lessons that I had to learn the hard way. And I want to share them with you so you don’t have to do the same thing.
Here are the things that I wish I knew about money about money at 18 and all through my young adult years.
1. How to disconnect my savings account from my checking account. (to avoid overdraft protection… yes, you read that right!)
This was, and is STILL, my biggest money mess up to date.
I didn’t pay attention to my checking account in college when I was working and just spent all the time. Dinners, clothes, trips, everything.
My card never got declined so I thought I was doing fine.
But in reality, little by little, my savings account that I had built up to more than $10,000 disappeared and I was left with $0 in savings and a lifestyle that required spending more than I was making as a barista.
Setting up your bank account this way is fine if you NEED to have overdraft protection. It’s better than having the add it to a credit card.
BUT make sure that you have it set up to decline your card when there isn’t enough in your checking account! And really just make sure to check your bank statements every once in a while. Try to do it daily, but even every few days is fine.
The big lesson for you: pay attention to your money!
Just don’t do what I did! Seriously, of all the things I wish I knew about money at 18, this is my biggest regret.
2. Credit cards are NOT the devil.
…And you need them if you ever want to get a car or an apartment.
I know that Dave Ramsey shares some of his knowledge about not using your credit report to rent an apartment. But when you’re an 18-year-old college kid and the dorms cost more than an apartment, you need to find a place to stay.
Without getting a credit card, you’re going to have a huge security deposit or they might not even rent to you. Because without a credit card, you don’t have a credit history. And you need a credit history to buy a LOT of things.
My parents got divorced and went bankrupt when I was 13. I watched them both spend frivolously constantly on their credit cards, but in the end, it was too much for them both. Even though my dad worked a high-paying job, they lived a life that outspent what they made.
Because of their poor money decisions, my parents both taught me the dangers of credit cards. And I swore to myself that I’d never get a credit card because I’d only ever buy what I could pay for out of pocket.
And, yes, that was a great mentality! I’ve never needed to buy something on credit and I don’t plan to.
And then I went to buy my house… and the mortgage lender came back and said that I had no credit.
“That’s good right? It shows I’ve never needed to borrow anything ever!”
“No, actually. That’s worse than having BAD credit!”
Trust me. It doesn’t make sense to me either.
But that’s the way that it is. Having credit in order to have a credit score is the best thing that you can do as a young adult. This way, when you go to buy that house, you don’t have the lender staring at you like you have 8 heads!
The big lesson for you: credit cards aren’t evil.
If you aren’t careful, they CAN lead you into deep, deep debt. It’s a slippery slope if you aren’t careful.
But get a credit card with a LOW limit and buy a tank of gas each month. Pay it off IN FULL every month and, viola!, you have a way to start building a good credit score. I am STILL no expert on credit cards, but I DO know that knowledge about them is power.
So learn everything you can about your credit score and how to build it well. You can check your credit score for free and get lots of advice from Credit Sesame. This is one of the biggest things I wish I knew about money at 18.
3. Start a retirement fund.
No, it’s not sexy to talk about retirement. But you’ll have SO much more than your friends will once they finally start adding to their retirement accounts at 25-30!
All you really need to know as a young adult is that if you want to have a nice big retirement account to retire when you are young, you need to start talking about retirement savings now.
2 words for you: compound interest!
This is one of the coolest things I wish I knew about money at 18, but thankfully I learned it around 20 and was still off to a good start! You can start your own retirement account on Betterment for free and be able to learn as you grow.
4. Don’t date or marry someone until you’ve seen how they spend their money!!!
PLEASE do this! If you know that “bae” works at McDonald’s but is always paying for people to get steaks when you go out, never wears the same clothes twice, and is always the first to whip out a credit card, either he’s got really rich and really generous parents, or he’s racking up a LOT of debt.
If you say to them “I’m trying to save money” and they laugh or make fun of you (that’s a red flag in general!), that’s usually a good sign that you aren’t on the same page financially.
Remember, once you’re married, you share everything… including debt! So if he’s bringing a ton of credit card debt and lots of baggage from overspending to a marriage, you need to do some serious thinking about how that’s going to affect you.
I love my husband and everything, but this is one of those things I wish I knew about money at 18 that has a lifelong impact. I believe that marriage is forever, so I’m with my spender-husband forever. (To his credit, he IS getting better at saving money, but I had NO idea about his spending habits back then.)
5. Don’t be someone’s safety net!
If you see your boyfriend starting to ask for money or your roommate is asking you to cover her bills for the month, it’s time to have a serious talk. You can ask what’s going on (you don’t need to be heartless), but make sure that they know that you can not and will not be their financial safety net.
You can help, but set boundaries early on. Don’t let your roommate go out to dinner every night and then say she can’t help with the electric bill this month. That’s not ok.
The big lesson to learn: sometimes you’ve got to let people fall.
If someone is a perpetual deadbeat on the bills or a flake when the bill comes around, it’s time to seriously think about cutting the dead weight.
There was a girl in my hallway in college who was always going out to dinner with friends but always left her wallet at home. Finally, her roommate stopped inviting her places, she lost a lot of friends too. It’s not just money that you could be losing in this process.
6. Start practicing frugality NOW.
I’m not talking extreme couponing here. I’m talking about learning to buy things on sale, looking for coupons before you go out to dinner, making your own detergent for your clothes… things like that!
This is another one of the things I wish I knew about money at 18 but I learned quickly! I worked during college and in order to stretch a dollar, I shopped for clothes second hand, bought textbooks used from Amazon, didn’t go out unless I had a coupon, and more.
Starting these habits early on in your adult life makes it easier to look for places to save as you get older. It’s a like a muscle that you need to hone and work out to get it to be perfect.
Honing those “frugal muscles” is one of the things I wish I knew about money at 18. It’s much easier to save more and more money if you’re already used to it.
7. Get the small, crappy apartment and be happy with it!
I’ve always wanted an apartment with a nice kitchen with granite countertops and 2 full baths… but not for $1,800+/month! Rent is expensive!
Live in the small apartment. Get a roommate who isn’t a slob. Save a LOT of money by skipping the fancy apartment. You’re not going to appreciate it at 18 anyway!
Sorry, was that too blunt? But this is definitely one of the things I wish I knew about money at 18!
You don’t NEED all of that stuff! Truthfully, you can’t AFFORD that stuff!
Chances are good that you are going to be making a mess of the place in the first place, so why bother getting something that looks beautiful and spotless?
Go for the low-cost apartment that costs half as much. You don’t need to live somewhere crawling with bugs, but you can get a modest apartment that gives you plenty of space to live and share with a roommate.
8. Just because you CAN doesn’t mean you SHOULD!
This can be true for about a million different things as a new adult, but ultimately, just because you CAN spend the money on something (whether it’s going out to dinner every night or going shopping every day), doesn’t mean that you should. Tough love, but this is things I wish I knew about money at 18!
Remember, you actually have to pay the money you borrowed for school and for credit cards BACK!
It’s so easy to spend when everyone else is spending. It’s even harder when you get a new “exclusive offer” credit card in the mail each day!
But the reality is that just because it’s socially acceptable to spend money even though you aren’t making any, doesn’t mean that it’s something that you should do.
9. Don’t go broke trying to look rich!
First off, when I was in college, Pinterest didn’t exist (it was in 2009… I’m not that old yet 😉 ). So the whole internet wasn’t at my fingertips trying to show me how to make a dorm look like a castle. We strung Christmas lights all over the place and had the prettiest dorm room in the hall.
But I’ve seen these dorms now. Girls are buying full furnishings for their dorms that are going to cost an arm and a leg to pay for… while either sending the bill to mom and dad or adding it to their loan debt or credit card debt.
Whether it’s decking out a dorm or buying a brand new car, don’t go broke trying to look rich. There’s nothing sexy about a 315 credit score or about getting that new car repossessed.
10. Don’t go into debt!
Debt is “normal” anymore – BE WEIRD! You don’t actually “need” debt to survive. You can save up and buy a car instead of financing one. And I promise… you don’t “need” a credit card just because they sent it to you in the mail.
Yes, I said to get a credit card. But pay that whole thing off at the end of EVERY month. If you can’t control your spending, cut it up.
Avoid the “everyone’s got debt” type of thinking. It’s easy to feel safe or comfortable with debt when you think about how everyone has it… but that’s not a healthy way to think.
Remember how your mom always used to say “if everyone was jumping off a bridge, would you do it too?” It’s exactly like that when you use the “everyone’s doing it” excuse for using credit cards.
Being weird with saving your money is GOOD! Embrace the weirdness!! 🙂
BONUS #11: You can make money without needing a degree!
This is one that I didn’t learn until I was older, but it has been the biggest blessing to have learned it at all. I was a college dropout because of many things: I had my oldest son at 19, knew I wanted to stay home with him, decided that we’d live off of my husband’s one income, and more.
But now, I’m a college drop out with $0 of school loan debt, making my own money from home. There are TONS of ways to make money from home! I mean it… TONS!!!
- How I Made $12,007 in One Month from Home
- Start a Profitable Blog the Right Way
- Make $20 an Hour Teaching English from Home
- Secret Shopping from Home
- How to Become a Virtual Assistant and Make a Full-Time Income Doing It!
- Make a Full Time Income From Home Proofreading
- 30+ Real Ways to Earn Money From Home
- 5 Side Hustles That Pay For My Groceries (and More!)
- Make $40,000 per Year From Home as a Bookkeeper
Don’t feel like you need to go to college in order to avoid flipping burgers your whole life. There are plenty of other things that you can do!
There are SO many things I wish I knew about money at 18! But we live and learn, right?
What is one thing that you wish you’d learned when you were 18? Let me know in the comments!
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