What I Wish I Knew About Money After Graduation

We’ve all heard the fairy tale that a college degree is the key to the kingdom, the magical reward that will unlock a world of success. In fact, this is rarely, if ever, true. There are so many things I wish I’d known about money before I graduated school – hell before I even decided to attend a four-year college.

Here are just a few.

Start saving early – you’re going to need it

It’s a good idea to open an investment account as soon as you can and contribute a little bit to it from each paycheck. Compound interest is a beautiful thing, my babies. I haven’t contributed as much as I wish I had over the years, but I started saving for retirement when I was 28. I’ve skipped some years, so I’m way behind where I’d like to be right now. Don’t do that, okay? Get in the habit and keep contributing.

Your credit card is not your friend

A credit card is not your every day, every month or every year friend. It is not your friend at all. It is a powerful resource that carries benefits and drawbacks. Take it from somebody who got herself into tens of thousands of credit card debt–twice.

That said, a credit card can be a valuable emergency resource, in case your car battery dies and you accidentally left your debit card at home; you get sick and can’t cover the copay for your insurance because you have to pay for the rent, phone, car insurance, wifi, food, pet food, and other necessities.

I recommend getting a credit card with a small credit limit and a low APR. Pay it off on time in full every month. When they send you that congratulatory letter saying they’ve raised your credit limit, I recommend ignoring it.

Make a budget, baby

For years, I didn’t budget for my freelance income because it all seemed so overwhelming with so many moving pieces. I didn’t even sit down and make an actual budget until I was 35. Before that, I just engaged in the magical thinking of “well, I’ll just cover dinner for all my friends this week because I know I’ve got a big check coming and they’re all struggling.” Underneath that thought was a sadder one “…and if I treat them, they’ll like me more.”

Then when the big check was three months late, because that’s what happens when you’re a freelancer, I was screwed. Cue the cash advance on the credit card to pay the rent. I’d feel stressed, so I’d “treat” myself to delivery sushi because I deserved it, right? I was working hard, trying to keep track of five assignments for as many different companies while trying to write my next book and pitch TV shows and do college lecture gigs and stand-up gigs and…

In short, make a budget.

For most of us, there is no longer a predictable career path

Some of us have watched our older siblings and cousins struggle to create the life that seemed entirely achievable to many people in our parents’ and grandparents’ generations: Go to college or a vocational training school, purchase a home, send children to college, retire at 65 and survive on savings from a job that lasted one’s entire adult life–-plus some help from Social Security and Medicare.

What is more likely than either of these options is that you will have a series of jobs in your chosen field; that you will at some point refine your goals and either change careers or choose to specialize in an area of your field with which you aren’t yet entirely familiar; that you will be laid off (or even fired) more than once. You’ll need to be flexible as technologies and best practices change.

Your career will be different than your grandparents (or parents)

You will deal with stresses and issues that may not have come up thirty years ago for Mom and Dad, or sixty years ago for Papa and Abuelita. Maybe Nonna stayed at home and raised six kids on Grandpa’s salary from the factory. Maybe Oma and Opa ran the best schnitzel joint in five counties and retired happily to an assisted living village with a full-time care facility once they grew infirm. Maybe Gram raised three kids on her own on a salary from her forty-year career at the post office and while money was tight, she still managed to sock away enough to give you $5 every time you saw her.

However they did it, they did it. And you’ll do it too—but in your own way, a way that may include several jobs over many years. My advice is to look at each job as an opportunity to build new skills. Love it or hate it or just feel “meh” about it, every gig is a chance to get paid to learn something new.

Most of us won’t have a spouse who pays for everything

If we marry, most of us won’t marry somebody with sufficient resources to cover all our expenses. I know older folks in marriages where the husband worked outside the home or ran a business from home while the wife did the 24-7 job of childcare, cooking, cleaning, paying the bills, and of course the incalculable task of performing emotional labor for everyone in the family.

There is a mental health benefit associated with contributing to household finances. I believe it is important for all capable and healthy adults to have their own means of earning money. Because we all know there’s no guarantee a marriage will last forever.

You must financially educate yourself

You may have parents or teachers who sat you down and broke down the basics of the stock market, or who taught you the difference between a Roth IRA and a Traditional IRA. That’s great–you’re lucky.

But even if you had that, you still must educate yourself about finances.

You will take greater ownership of this learning if you engage in it of your own volition. You can learn an awesome amount from debt reduction books even if you’re not a compulsive debtor or spender. My favorite books? “Get Out Of Debt Now–The Easy Way” by Allen Carr; “Money Drunk/Money Sober: 90 Days To Financial Freedom” by Mark Bryan and Julia Cameron; and “Young Fabulous and Broke” by Suze Orman.

Now go out there and be a money adult, you wonderful young adult!