Did you learn anything about personal finance in college? Money management? Credit? Investing? Or did you take the required courses needed to graduate? For me those were POINTLESS classes like anthropology, calculus, and astronomy.
The longer I'm out of college the more disappointed I am with how much valuable and useful information is not included. When I graduated I felt very overwhelmed entering the real world, do you agree? Did I not listen in class because I was an expert procrastinator and studier? Maybe I didn't take the right major? The short answer is yes and no. Although I could have applied myself more in college it's a serious problem with our education system. Society tells us to go to school, get an education, find a job, and everything else will work out.
Unfortunately, it isn't that simple!
There is a serious disconnect with what is taught in college and what is needed for you to succeed in the real world. It is the reason I started this blog and will be publishing my first book next month. I want to help bridge the gap of what isn't taught in our education system. After graduation I realized I didn't know much about real world topics like credit cards, investing, and financial planning.
Why did college not teach us how survive and thrive in the real world? Why aren't these topics aren't taught in school:
-Understanding your credit score and how to use credit cards responsibly.
-The countless steps and requirements to buy your first home.
-Understanding how to invest in the stock market.
In 2015 I was determined to learn more about personal finances and bought a handful of books on Amazon. It was my mission and has been every since, to personally learn more and help others along the way.
In my Amazon search for "personal finance" there were countless books to choose from. Some of them I had heard of (Millionaire Next Door & Think and Grow Rich) while others just ranked high in the search results. One title really caught my eye, "Why Didn't They Teach Me This In School" written by Cary Siegel. The title summed up my post college life question, why didn't they teach me this in school?
This is one of the easiest books to read and apply instantly to your life. The book itself is 180 pages of one page lessons that focus on money management for young adults.
Some are my five favorite financial lessons discussed in the book:
Always have an emergency fund: You should always have 3-6 months of money in a savings account! Read more here.
Develop and maintain a good credit rating: Your credit score is your adult report card. A good credit score will help you secure home loans, auto loans, ability to rent an apartment and your future employment.
Invest in your 401K (at least to employer match): Your 401K will be one of the primary accounts used to withdraw money from in retirement. Take advantage of the money your employer matches.
Know your score (net worth): I've been a huge fan of net worth tracking since I started in 2015. It's also been my most popular blog post and featured on Rockstar Finance. Read it here.
Don't keep up with the joneses (they're going broke): Don't try to impress people by spending money on nice cars or houses. Focus on your budget, your spending, and your goals!
By luck and networking I was able to get in touch with the author through a director at work and speak with him on multiple occasions.Originally this book was intended as a guide to pass along to his children. But he quickly realized it would be an invaluable resource to thousands of others and decided to publish with Amazon & Create Space.
Cary was generous enough to answer a few questions to further elaborate on his book.
Super Millennial Q: Love your book and how easy it was to implement into my life instantly! A lot of my readers are still working on paying off student loan debt from college. Of your 99 lessons what would be the most important to someone in their 20's or early 30's?
Cary Siegel: Always live below your means!
Super Millennial Q: Why do you think personal finance isn't a subject in school? Would you make it a requirement in high school or college?
Cary Siegel:It's just not a priority for schools. In most schools it's not even on the school's radar. Even if is was a priority, it takes a lot to change curriculum requirements. Most importantly, it's not a priority for parents. If it was, they would push it as requirement for schools. And, yes it should be a requirement for elementary, middle and high schools high school along with college.
Super Millennial Q: What do you think is the biggest mistake people make planning for their future? Not starting soon enough, saving enough or something else?
Cary Siegel: Getting in debt at an early age. The question to graduating college students isn't "Do you have any debt?" it's "How much debt do you have?" Don't use a credit card until you can pay it off every single month!
Super Millennial Q: Any other thoughts or advice (other than reading your book)?
Cary Siegel: Don't be psyched out about money management. Most people are intimidated about money so they don't take the time to learn more about their options. Instead take one hour of your week (every week) to read or talk to someone you respect about money management. The average teenager spends 9 hours a day (yes – a day) on their smart phone. I'm just asking for 1 hour a week to use their smart phone to learn about an important subject.
Overall this is one of my favorite finance books I've ever read and would HIGHLY recommend it to everyone else. The $10.70 of the book is one of the best investments you can ever make in yourself. The book is easy to read, easy to implement, and will serve as a financial guide to your life. If college was half this useful our society would be much more financial savvy. Thanks Cary for a great book and your help in writing the post.
"Are you on a laptop all day? Would keeping an excel file or Google doc file help you track your expenses easier? Would it be more convenient to keep an old fashioned pen and paper type of budget? How about keeping a running tab on the fridge so that you are tracking all expenses?
"For the few that actually look at their goals again, it’s common to revisit them only at the end of the year. This is a crucial error. As our circumstances may change day to day and month to month, so will our goals. A lot can change in twelve months, which is why I propose reviewing once a month, or at the very least every three months.
Revisiting also keeps our desires relevant. It’s helps us remember that we even have them. Ideas aren’t enough, we must execute.
As the great Thomas Edison said, 'Vision without execution is hallucination.' " -Jiu-Jitsu Finance
Increasing your income
"After you have lowered your expenses, it is time to bring in more income. There are many ways to bring in more income especially during the holiday season. Maybe your full-time gig will let you work extra hours for overtime. In addition, retail stores typically hire for the holiday season. That part time holiday gig could turn into a longer gig...
Retail jobs aren't the only part-time jobs available. There are plenty of other side hustles you can pick up right at home to make extra money like: Freelance Writing, Virtual Assistant, Social Media Management." -Financially Fit & Fab
Turn on your automatic savings
"Another no-hassle way to save is by setting up an automatic transfer to your savings account. By automating your transfer, you're making sure that you don't forget or pay your savings last–and as a bonus–automating your savings means you never "see" that money and subsequently makes it sting a little less.
Two new apps that I am loving lately are Digit (which has a cult following). It automatically transfers money from your checking account you won't miss. I also love Qapital, which has rules you can set to "save the change" from your purchases. I saved over $75 my first month of Qapital, which was really astonishing to me. Click here to give it a try." -Financial Best Life
Develop the habit to spend with cash than card
"To spend with cash is also an actionable way to get out of debt. According to the research on peoples spending with credit cards; it was revealed that those who shop with credit card are impelled to spend more on luxury items because they feel they are paying with “play or fun money”. In other words, people who shop with credit card spends more than required.
Evidently, finance advisors hold a strong stand on this. They strongly advise that people who are working on eliminating their debt should cultivate the habit of spending cash, to avoid being tempted to spend on irrelevant items." -MoneyMiniBlog
Leave your wallet in the car when shopping
"This trick is simple but impactful. When doing any kind of shopping, use cash, and only take the amount of money you want to spend in the store with you. Leave all other cash, credit cards, and debit cards in the car.
This is very powerful, especially when grocery shopping. In addition to the amount you plan to spend, you can consider bringing in a small cushion of a few dollars (in case there are hiccups at the register). You will shop (and spend) completely differently when you only have a hundred dollar bill with you versus a hundred dollar bill and your debit and credit cards.
Don’t give yourself a way to spend more money than you want to — and you won’t." -Hope + Cents
Start and maintain an emergency fund
"There is no fixed formula for how much you should have in an emergency fund. Some school of thoughts say 6 months’ worth is sufficient, some say a year’s worth. Everyone’s situation is different and as such, each strategy should differ. To start however, I would suggest understanding your spending habits, and then implementing a 3-6-9 guideline.
3 Months: If you are single without kids, renting, no car, partially dependent on parents for income or any combination of these factors, start off with a target of 3 months’ worth of expenses for a rainy-day fund.
6 Months: Married, kids under 18, own a house or condo, own at least one car, or any of these combined, the base target should be 6 months’ worth of expenses (if married, base it off the income of the highest earner).
9 months: Self-employed, freelancers, anyone with a volatile job or unpredictable paycheck, 9 months’ worth should be the benchmark." -Investment Conversations
How students should avoid the debt trap
"The easiest way to prevent yourself from falling into the debt-trap is by living within or below your means (that is, not overspending). In addition, it is necessary to do research before getting credit cards (or signing any contract to take on loan/ debt) so that you really understand how it works. As a student, you must learn to treat your credit card with respect." -Investment Conversations
Build a budget and stick to it
"There are many free apps available to help you track expenses, but I always prefer using my own spreadsheets. That enables me to have the most control over what I’m doing. I understand that being able to access your spreadsheet on your phone makes tracking significantly easier, which is why I prefer Google Sheets over Excel. You can download the Google Sheets app and pull up your expense tracker wherever you are to input a transaction or monitor your spending. By combining the expense tracker as separate tabs within the same spreadsheet as the bill tracker, you can have all your finances in one easy-to-access location." -The Budget Boy
Create an automatic savings account for travel.
"Here's how this automated system specifically works for you and your travel fund. Once it's set up, it goes like this:
-Your checking account receives income.
-The next day, your checking account automatically transfers money to a separate (different bank) savings account—aka your travel fund.
Know Your Interest Rates
If you have anything that you are making payments on every month, you need to know how much interest you're paying. Make sure you know these numbers, too. Ideally, you'll want to pay debts down that have a higher interest rate first. However, there is another school of thought out there that suggests paying the bill with the lowest balance first. I'd say either way is fine as long as you're making progress and as long as the higher interest rate stuff isn't astronomical.
Action: Look at your statements or call the companies to get your current interest rates on all monthly obligations.
Negotiate Lower Interest Rates
If, by chance, you ARE paying astronomical interest rates on any of your liabilities, call and try to negotiate a lower rate. Oftentimes, if you've demonstrated a history of paying on time, the company will work with you to reduce your rate. The only trick is, you have to ask.
Action: Know your numbers and call the companies to negotiate if you're paying high interest rates.