When I graduated from college, I had student loans, a low-paying job and bills for food and shelter. I did not make the best financial decisions, and at first, my credit suffered. I’m fortunate now to not be in that situation, and there are a few things I’ve learned along the way:
1. A job is a job.
My first job out of college was an attempt to follow my dream of working in the nonprofit field. It was a great opportunity, but the pay was low, and the company didn’t have enough hours for me to make a living. On top of that, it wasn’t a great fit. So, I began applying for anything I could get my hands on. It didn’t feel good to have a college diploma and apply for jobs where I didn’t feel like I’d be using my degree, but I needed to pay the bills somehow.
I swallowed my pride. I ended up working for a bank, which certainly wasn’t my dream, but a job is a job. I had great colleagues and supervisors, I worked hard and the money was enough for me to live on. Even if you’re in a job you don’t like, it’s important to build relationships and give 100 percent. Even though my job at the bank and my job now are very different, my supervisor was able to vouch for my transferable skills when I used him as a reference, and my work there became a personal investment in the long run.
2. 20% down payments on mortgages are not your only option.
Up until very recently, my fiancé and I were paying an absurd amount of money on rent. The plan was to save up, little by little, to be able to afford a down payment on a home. One day, I was talking with one of my colleagues about how it felt like it would take forever to save up enough, and I learned that there are so many more options than the traditional 30 year fixed-rate mortgage with a 20 percent down payment.
With help from a great broker and determination not to buy more house than we could afford, we were able to finance a great starter home with only a three and a half percent down payment. Our mortgage payment, which includes mortgage insurance and property taxes, is 25 percent less than our previous monthly rent.
Tip: Learn about different types of mortgages here. Also, it’s important to note that homeownership is not for everyone. Some experts will argue that buying a home is unequivocally the best decision that you can make, but that’s not always necessarily true.
3. Saving for retirement is hard, but if you can, do it sooner rather than later.
Pension plans are going extinct, and the future of social security is uncertain. That means you need to take retirement savings into your own hands. Here’s a little story from On Your Own Two Feet about why sooner is better:
Tabitha saved $5,000 a year for her retirement. Tonya saved $10,000 a year. Both women saved these amounts for 10 years, made the same investments and saw their money grow at 10 percent a year. Guess who had more money at age 65?
At first glance, it may appear to be Tonya, but it’s actually Tabitha. Tabitha began saving at age 22, while Tonya didn’t start saving towards retirement until age 40, meaning that Tabitha’s money had 18 more years to grow than Tonya’s money (assuming they both retired at 65). This means that Tabitha’s retirement was $1,850,000 while Tonya’s was $665,000.
It’s hard to think about retirement when you’re young, and even harder if you’re not well off. Even if you can only save $25 per month or less, that is a great start.
4. Some bills are negotiable!
I had read articles in the past about people being able to negotiate their monthly bills, but I never thought I had the skills to do it myself. When I learned that I was paying about $40 more than most of my peers on cable, I decided to give it a shot. For about an hour of my time with my cable company, I was able to reduce my bill and increase the number of channels available to me.
If you’re not as brave and you don’t mind a cut being taken from your savings, there are some services like BillFixers and BillShark that will do the job for you.
The same can be done for interest rates on credit cards or loans. If you are stuck in credit card debt like I was, it may be worth your while to give your provider a call and see if your interest rate can be decreased. If you have a trusted provider for a car or other type of loan, you may be able to refinance at a lower interest rate.
A $5 to $10 per month reduction on a bill may not seem like much, but it certainly adds up!
5. An emergency fund can save you from falling into credit card debt.
When I started my emergency fund, I was saving so little each month that I felt like it was pointless. I changed my mind when a car problem set me back and I had some cash on hand to cover it. Before, I would have put that kind of an expense on my credit card, and that’s how I ended up in debt in the first place. Here’s a great article on getting started with an emergency fund.
6. Most personal financial advice is not written for people who are strapped for cash.
I follow several personal finance bloggers on Twitter and Facebook, and it is infuriating how often I see articles that suggest “cutting back on your Starbucks latte” as a great way to save money. People who are seriously struggling to pay bills are looking for tips and tricks that go beyond couponing and side-hustling. Here are a few blogs that do their best to write for all walks of life:
If you are in need of Financial Wellness Services, call SC Thrive at 800.726.8774 and select option “3” to connect to FREE budgeting and credit counseling!
About the Author:
Lindsey Perret is a Population Health Specialist at the SC Hospital Association in Columbia, SC. She studied Spanish and Gender Studies at Wofford College and has a passion for social justice and financial wellbeing.
When she’s not working, she likes to spend time with her fiancé Tyler and her dog Mozie.