Advice I wish I Got While In College

Have you ever been so broke for so long that the first chance you get some decent money, you just want to blow it!  You just want to get everything you've ever wanted, the car you've always dreamed of, go to places you've read about etc.  It happens to most of us, it happened to me when I got my first decent paycheck, it happens to lottery winners even first time millionaires.

I have to admit there is something heady about spending and being able to afford it especially after being a poor college student for so long.  The average annual income for a college student is 14000 dollars and after paying living expenses and bills, there is hardly any room left for extras.

The first decent paycheck finally allows us to get extras, like a new wardrobe or a new car or finally taking that International vacation you have always wanted.  If you've been without for so long, it’s easy to go overboard and get over extended, for example I have always wanted to go to Thailand, the problem comes in when I want to go to CostaRica, Peru and Panama in the same year and actually go ahead and book those vacations just because I can afford it.

When everyone is making and having fun spending money, making sober decisions can be really difficult.  When the recession hit, the good times, became the lean times, It made me sick in the stomach after I reflected on how carelessly I had spent money on all the stuff  that seemed really important at the time, but had no value.

Sometimes when you go through a difficult financial time, you get emotionally scarred by it, for example  I have heard stories of the generation that went through the depression, they were so traumatized by those experiences , that even when they started making money again, they were terrified of losing it, that they rarely did anything extra for themselves.

I believe in making sober financial decisions and having a good quality of life that will enable me to have great experiences.  Having lots of money is no fun, if I can’t use some of it to do see some of the places I want to see and experience before I die.  The inverse is also true, having little money that I can’t experience life’s little extra’s is not something I want either so there must be a happy median where I can have my cake and eat it too.

The Happy Median

So the first solution is to have a big picture in mind and write down all the material things you would like to own for example a home, a nice car etc

Next would be to make a list of experiences that you would like to have, (some people call this a bucket list), you can really go to town on this one,  for example see the great wall of china or the grand canyon, or jump out of a plane, or go on a romantic trip to Paris or Spain, anything you really want to do.

Open a separate savings account that will enable you to have sub accounts and then allocate  a portion of your income to those sub accounts; so in our case the first sub account would be assigned to "my material goals" and the second sub account would be assigned to "my bucket list", the third sub account would be assigned to "my emergency savings".

Then, create a budget that will enable you to live below you means and allocate to your goals, bucket list and emergency fund.

Finally protect your 6 with insurance.  Get some decent health insurance and pay attention to your deductibles and co-pays, a serious illness could do a lot of damage to a carefully crafted financial plan.  Do not skim on disability insurance, disability insurance replaces a portion of your income if you experience a long-term illness or accident, and helps you pay your bills till you are able to go back to work.  Finally get some very good life insurance that you own and can pay up in 20-30 yrs while you are still young and healthy.  I would advise all college students that are planning to have a family some day to purchase some permanent life insurance when they start working; the cost of life insurance is relatively inexpensive and manageable if you get it while you are young and healthy.  Life Insurance enables you to leave a cash inheritance for your family, it helps pay the bills and make up for your lost income if you pass away in your working years or increase the size of your estate to pass on to the next generation if you are blessed with a long life.

Lastly live your life fully and without fear or anxiety.  Purchase those things you have planned for and chase those experiences that you've dreamed about once you have saved up for them.  Unrealized dreams hurt the soul and accomplishing goals and dreams help us live a memorable life. A well planned and prosperous life is possible for everyone; it just requires being Intentional about working on your goals, and keeping the big picture in mind.

Let me know what you think, please subscribe and leave a message below.  Blessings!