Financial advice for an 18-year-old?

Last week, Isaac asked Get Rich Slowly readers for advice on how to handle life after grad school. He’s about to enter the workforce and needed tips on what to do until he gets his first paycheck. Isaac was very pleased with your helpful responses.

This week, we’ve got a chance to help somebody even younger than Isaac. Nico is 18, a sophomore in college, and financially clueless. He needs help! Here’s his story:

I’m pretty young — about to start my sophomore year of college — and I literally have absolutely no knowledge of anything financial. I do have a simple student account with a paltry amount of money in it, and that’s really about it. So yeah, the majority of your site goes over my head and some things are quite intimidating.

I’m going to continue browsing the basics section in order to see if I can glean some information, but are there any other resources you would recommend to a financially clueless 18 year-old? I think it would be a good idea to start this kind of stuff earlier rather than later.

Nico’s right: The time to start learning about finances is now, before he needs to know the information. Fortunately, he’s not as far behind as he thinks he is, even if he does feel clueless. It’s my guess that most young adults feel lost when it comes to money.

So, what resources would I recommend for an 18-year-old kid? As much as I’d love to pitch Get Rich Slowly and Your Money: The Missing Manual, I actually think there are better options, including:

  • Michael Mihalik’s Debt is Slavery, which carries the subtitle, “and 9 Other Things I Wish My Dad Had Taught Me About Money”. This slim volume is one of the quiet classics of personal finance, and it’s perfect for college students. My review from three years ago gives a run-down of the book’s contents.
  • On the web, CNN Money has a great little site called Money 101, which features a crash course in various financial topics. Nico should bookmark this page and refer to it whenever he has questions about a particular topic.

Although Nico didn’t ask for specific advice, I’m going to give him some anyhow. I’ll repeat the same advice I give when I speak to other college students. Namely:

Develop a basic budget

It doesn’t have to be fancy. Whatever Nico chooses to do, he should get in the habit of setting aside 20% for saving and investing. This may sound like a lot, but if he can start the habit young, it’ll be easier — and will yield greater returns — in the long run.

Learn how to work

I made a lot of mistakes when I was younger, but this is one thing I got right. I knew my parents couldn’t support me when I was in college, so I worked as many jobs as I could. I learned how to work hard, how to deal professionally with all sorts of people, and how to maintain a positive attitude. These skills are tremendously valuable later in life.

Avoid lifestyle inflation

Even in college, it’s important to watch your spending. As Nico’s income increases, he’ll be tempted to increase his spending in proportion. The more he can resist the urge of lifestyle inflation, the more successful he will be with his money. It’s okay to spend, but be reasonable.

Do what you love

A low-paying job that leads to future prospects in a career you like is better than a high-paying job in a career that doesn’t move you in the right direction. Never stick with a shitty job. And don’t be afraid to change your major. It’s easier for Nico to change direction now than it will be in five or ten years.

Maybe it’s because of my own experience racking up debt during college, but I think it’s important for young adults to learn the fundamental law of personal finance: To build wealth, you must spend less than you earn. There’s more to it than that, of course. The less you spend, the more flexibility you have.

When I graduated from college, I bought a new car and developed credit card debt. I had to take any job I could find because I was tied to monthly payments. When my friend Sparky graduated, he had a lot of freedom. His debts were minimal. He traveled the U.S., taking whatever job struck his fancy. He spent time in Mexico. He spent five months traveling southeast Asia. He was able to do these things because he didn’t have expensive obligations.

I don’t think Nico should worry about stuff like investing and insurance right now. These are important, but they’re beyond the basics. For now, Nico should focus on learning how to earn and spend money wisely.

What do you think? What do you wish you had known about money when you were 18? What advice do you have for Nico? What books or websites (or other resources) would you recommend for him? What steps can Nico take at 18 to make sure that Nico at 41 is happy, wealthy, and wise?

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There are 114 comments to "Financial advice for an 18-year-old?".

  1. Paul Williams says 27 August 2010 at 04:10

    I’d actually recommend Your Money or Your Life as well. It might not be completely relevant to him at this stage. But if he can begin to see that “money = life energy” at this early age, it could have a powerful effect for the rest of his life.

    Maybe it’s better for those who are in crisis mode, but I think the concepts of life energy and calculating your true hourly wage can be extremely useful for just about anyone. That book helps to change the way you look at money.

    I also agree with you that Nico doesn’t need to think too much about investing and insurance yet – not until he’s got a more solid foundation. But the sooner he can start investing the better. Compound interest will be his great friend since he has so much time ahead of him (hopefully!).

  2. lostAnnfound says 27 August 2010 at 04:18

    Go to the continuing ED department of a local high school or community college and take a class in economics, specifically on personal finance. This is offered at our high schools for full-time day students (which I will make sure my kids take this class). I wish they offered this when I was there. It starts with savings & checking accounts and goes up to investing.

  3. Daniel says 27 August 2010 at 04:22

    A few things:

    1. Pay your credit card off each month, if you want to put something on the card but wouldn’t be able to pay it off, don’t buy it
    2. I think the above info is right, don’t worry about investing just yet, until you a decent paying full time job it will really colic ate things
    3. Establish a small emergency fund in a savings account, probably $2000-$3000 should be sufficient
    4. Pay what bills you have ON TIME, this will help you start building good credit now that you can leverage later to buy a car or house
    5. This is my personal feeling on this, but never take out a loan for anything except a car or a house, pay in full for everything else. That means staying away from financed items etc

    Hope that helps. I don’t really have any resources to reference, anything by Suzy Orman is fairly straightforward and easy to approach.

    Edit: Loans are ok for school too

  4. AC says 27 August 2010 at 04:24

    I hope that he learned enough financially to be selective in his choices for higher education. If anything, he needs to assess his current situation and get out of the habit of “blind indebtiness.” Yes, college may be “good debt,” but making the wrong choice in which institution you attend can be verying crippling to you future choices after college. Too many people are leaving college now with $30 to $60K in loans limiting a lot of their choices after the experience. If Nico is headed into that direction, I strongly encourage him to look more thoroughly at all options including staying home and online campuses and pay close attention to what he is paying per credit for some of these courses that he is taking. I never paid attention when I was his age and though I didn’t get over my head like a few, it would have been good to realize and compare all my options.

  5. JM says 27 August 2010 at 04:31

    Get a credit card to start building a credit history. Keep the limit low for now to avoid temptation, and pay the card off every month.

  6. Chett says 27 August 2010 at 04:32

    The Wealthy Barber, or Richest Man in Babylon. Both books are told as parables and are easy to digest.

  7. Mike Piper says 27 August 2010 at 04:34

    I’d argue that now’s the perfect time to learn about investing. There’s no reason you can’t open a Roth and get started while in college.

    Investing can be complicated, but it doesn’t have to be.

    Also, as long as you always spend less than you earn (and you therefore never end up in debt), there isn’t much left to personal finance other than investing and career.

  8. Andrew says 27 August 2010 at 04:35

    I am not too far ahead of Nico (24 years old and two years out of college), but there are a few things I wish I had done at 18 that I didn’t even start to think about until after I graduated.

    First, put a lot of thought into choosing a major. Some people have this all figured out by the time they enter school, but I certainly did not and chose “General Business” since I naively believed “Business = Money”. I later switched into Marketing, but once again, put little thought into that move. I now work in Finance, but am at a disadvantage for some positions I want because I was not a Finance or Accounting major. So, my advice is to start researching growing industries and sectors, and find one that interests you. Then select a major that will help you obtain the knowledge and skills to work in that industry. This way, there should be a nice job market out there for you in 3-4 years and you can do something you enjoy. Also, specialization is key. Nowadays, competition for jobs is fierce, and those with specialized skills often are the ones ultimately getting those job offers.

    Next, do everything you can to build credit and not get into substantial debt. This can be very difficult when young since credit opportunities are getting harder and harder to get. If you weren’t able to get scholarships/grants to pay for everything, don’t be afraid to work. Student loans may sound like the easy way out, but don’t count on a high-paying job to pay them off right out of college. I really wish I had worked instead of taking out loans for the portion of my schooling for which I didn’t get scholarships/grants. My payments now are maneageable, but I’d sure love to have that extra $240 a month.

    Finally, I would start learning about investing/finance as early as possible. As a previous comment stated, compound interest is very powerful, and the earlier you start, the better. Get to the point where you can manage your own money and investments when you start collecting those future paychecks. As a licensed stockbroker and financial advisor to a few clients, I can’t believe I am paid to do what I do. With a little research on your part, you will be able to handle it all yourself without paying high commissions and fees to a broker.

  9. Coley says 27 August 2010 at 04:36

    At 18, major and career selection are far more important than any advice about savings accounts.

    “A low-paying job that leads to future prospects in a career you like is better than a high-paying job in a career that doesn’t move you in the right direction.”

    Nico, take this all-too-common mantra with a grain of salt. You want to find something that you enjoy doing, for sure, but it’s also important to be certain that someone is willing to pay you a decent wage to do it.

    This is just a hunch, but I’m willing to be that most 18-year-olds would prefer watching movies to studying electrical engineering fundamentals. That doesn’t mean that majoring in Film Studies is a smart move, even if you plan on being the next Speilberg.

    Eventually, work is work. You might as well get paid well to do it. In eight short years (four years out of school) some people your age are going to have steady six-figure incomes and have the opportunity for early financial independence, and others are going to still be begging for minimum-wage internships, making coffee in the hope of “getting their foot in the door.”

    You need to be realistic about what you want out of life, and unfortunately, many of the tenured academics who are some of your biggest influencers right now don’t necessarily have that realistic of a picture about the world outside of campus.

    When you consider some of the options that you want to pursue, try to talk openly with people in that industry who have followed that path. Ask them what they recommend and what they would do differently, what they enjoy and what they dislike, and whether or not they think that you’re the kind of person who would enjoy it or not.

    You definitely want to be happy and enjoy what you’re doing, but there’s no reason to be poor at the same time.

  10. Dink says 27 August 2010 at 04:44

    I disagree with AC about looking to online classes to complete your degree in an effort to save money — unless you’re taking a handful of online classes from a major university rather than one of these degree mill online-only colleges. Moreover, you won’t get the same personal, in-class experience as you would with a school that requires you to be in a seat which won’t just hinder your education on that particular subject, but it will also hurt your people skills (the most important skills right now). Don’t think that your University of Phoenix degree is going to be worth nearly as much as someone else’s degree from even a state school. Go to the best school you can go to; everybody has a degree these days, you need to set yourself apart.

    Speaking of school, I wish I had looked into scholarships more for both undergrad and grad school when I was Nico’s age. Student loans are the biggest burden I have right now and I know, with a little work, I could have gotten most of that taken care of with scholarships. Anybody in college right now, start applying for scholarships! Seriously, very few people actually apply and a lot of money goes unclaimed. Save yourself a lot of trouble down the line.

  11. Shari says 27 August 2010 at 05:05

    The worst financial advice I got was from my mother. It took me a long time to realize that she really wasn’t advising me well and I’m still recovering from that now and I’m in my late 30s. Make sure that the people you are listening to make sense for your particular situation.

  12. Kate says 27 August 2010 at 05:18


    I’m only 25, so the poor financial decisions I made when I was your age are memorable (I see them every time I open up a credit card statement!):

    1a. Or clothes, shoes, gym memberships, tech gadgets, etc.

    2. The spending on travel–totally worth it. I don’t regret a dime I spent on travel, if it was Spring Break travel to Mexico, or weekend trips around the country. Completely worth it.

    3. The student meal plans? They run out quickly. Try to avoid eating at the ‘branded’ eateries you’re sure to find on campus.

    4. Greyhound bus travel is not a dirty word. Nor is hostel. Travel cheaply, you won’t mind (2 star hotels in foreign countries are NOT that bad).

    5. Don’t worry about the 20% saving thing (I disagree with J.D. here). If you can set aside some money, that’s great, but understand that a lot of the fun things that going to college allows won’t come again in your life.

    6. MEET WITH YOUR ADVISOR (especially if you are going to a large school). They’ll be able to help you with scheduling courses, and can also write a better rec letter than most of your professors will.

    7. Don’t worry about frugality, either. I’m going to disagree with J.D. again here (sorry J.D.!) and tell you to instead learn as much as you can about income and ways to increase it. Any group of people that gladly drink Vladmir vodka and Natural Light beer ARE already frugal.

    8. Remember that entrepreneurship is always an option. When you’re stressed about getting an internship/getting a job/deciding on grad school vs. job, always remember that you can create a job for yourself. Even if you fail, it shows great initiative, and you can start up a company for around $1000.

    9. All this talk about investing–investing isn’t just stocks/bonds/funds. Real estate is an option. Creating a business is an option. Don’t just blindly follow the crowd (and that goes for more than just investing).

    10. I wish I had a legit #10, but I don’t. Have a blast, and remember that everyone who replies to this is completely jealous and wishes they were in your shoes…even if they are debt free. 😉

  13. Sam says 27 August 2010 at 05:20

    I second LostandFound. I took a personal finance class offered through my local adult education classes after college. I might not have been ready for the class during or before college, but it sounds like Nico is.

    I would do my best to avoid getting sucked into either credit or student loan debts if possible.

  14. Erik says 27 August 2010 at 05:21

    Avoid the following mental trap. It got me.

    Let’s say you are earning $10/hr and working part time so $200/wk. I thought I would be earning 5x that amount of money very soon so it seemed reasonable to spend more than I made with the assumption that it would be easy to pay back later. This argument is what gets a lot of people in trouble.

    I don’t think that saving is important at this phase of life but staying within your means is ALWAYS right.

  15. fantasma says 27 August 2010 at 05:26

    Don’t sign up for a credit card just to get a free t-shirt or gift card.

  16. Kestra says 27 August 2010 at 05:36

    Try different courses to see what actually appeals to you. What you think you should do, may not be what you should actually do, career wise. There’s a lot of pressure and expectations at that age. And hard to know how you really want to live.

    Learn about credit cards and credit scores. Having some safer debt to build up a good credit score is useful, but be careful of credit cards. At 19 I hurt my credit score for years by refusing to pay the annual fee on a card I never used and didn’t particularly want. (Signed up for a chocolate bar.) No one explained to me that I should either pay the bill or cancel the card and the mail all came to my parents house, even, so they should have said something. Eventually my credit recovered and all is good now, but I really wish I’d known how not paying $15 would affect me.

  17. Tom says 27 August 2010 at 05:38

    Make the interest payments on your loans each month, even if your loan provider allows you to defer them. It’s sobering to graduate and see that the “principal” on your student loans is 20-25% higher than what you actually borrowed and got to spend.

  18. Nancy L. says 27 August 2010 at 05:39

    1. A few things you absolutely love are much better than a lot of things that are “ok”–this goes for clothing, home furnishings, gadgets, trips–pretty much anything. When you are young, it seems like you’ll never catch up to everyone else, so there’s a big temptation to rush out and buy stuff to fill up your apartment. I can tell you right now that if I were starting over again with a clean slate, I’d be a lot pickier about what I chose to spend money on, bc paying back debt AND clearing out a mountain of clutter is pretty frustrating.

    2. When deciding what you want to do for a living, take a look beyond the entry level positions in the want ads. There are a ton of entry level graphic designer positions out there, but depending on where you live, there are very few mid to upper level positions. Also, consider studying a generalized field and then specializing in your interest. For example, in the film & tv industry, the stablest & generally best paying jobs are often the behind the scenes management & money people. A bonus is that if you decide you don’t like your chosen industry, you have skills that easily translate to a wide variety of companies.

    3. Investing is generally good. But don’t rush into it based on a feeling that you *should* invest or bc one person starts telling you about some great opportunity that you’d be stupid to miss. First of all, there’s a lot of scams out there looking for neophyte investors. You don’t need to be the person who loses their nest egg to prove this point, even if your cousin SWEARS it’s going to triple it’s value in less than a year. Take your time, do research, and make sure you diversify your investments. That way if one tanks, you haven’t lost everything. Also, make sure you always sign up for the 401K at whatever job you are at, and contribute at least as high a percentage as the company will match.

    4. And finally, the best thing you can do for yourself is learn how to budget. It’s really simple at this point in your life because you have your income and you have your expenses. If your income is not greater than your expenses, you have a bad situation that needs to be fixed. A really good thing to do is to write down those unexpected expenses that crop up each year–for example I just had to pay $20 to get my car’s emissions testing. After a year or two, you should have a sense of when you need to buy birthday gifts, when you need to renew membership fees, etc, and then you can include those costs in your budget. You will want to include money for an emergency fund in your monthly budget, and if possible, a separate amount for savings.

    Good luck! I wish I’d been as aware as you are at your age!

  19. Jennifer says 27 August 2010 at 05:45

    Great post, and comments. I agree with those who say major and career choice are fundamental to future financial security. There’s something to be said for doing what you love, but if what you love doesn’t pay the bills, you’re going to be hurting. I found that out the hard way, and have drilled it into my 16 year old daughter so she doesn’t have to. Work to live, don’t live to work.

    Also – my daughter’s school offers Economics of Living as an elective, but I made it mandatory for her. I was completely clueless about money as a young adult, and have had a hard row to how as a result. I am determined that she will at least be equipped with the tools she needs to avoid the same trap. I wish every high school offered such a class, and that it was mandatory for graduation!

  20. ajc @ 7million7years says 27 August 2010 at 06:04

    I would strongly advise any young reader to get some ‘business experience’ on the side.

    Fortunately, with the internet, that is SO easy these days:

    1. Start a ‘for money’ blog. Stuck for a topic? Try this: write a blog aimed at other high school / college kids chronicling your attempts to improve your own financial situation … worst case, it could read as comedy.

    2. Sell stuff on eBay; even better, find stuff in China and then sell it on eBay. Try not to get ripped off AND make a profit. Write about it on your blog … it will DEFINITELY be funny!

    3. Start a web-site selling anything; OK it may not make money (or, it COULD become the next Facebook), but you will learn heaps.

    Better yet; try all three!

  21. SweetTPie says 27 August 2010 at 06:09

    These things may not be explicitly financial skills in the stocks-bonds-savings manner, but they will have an impact in the long run.

    A resource that many overlook: professors in your major. Now, I’m not saying that you should go and chat with them about financial stuff. In general, professors will be references for applications, and may have contacts with industry folks that they can give you to help find an internship, and later, a job. Or, in certain fields, a professor may hire you to go grunt work or research for them. Start by making good impressions. Don’t suck up, but try to be on time and be engaged in class (intelligently, not just to hear your own voice).

    If you’re looking for an internship (hard to get in this climate, it’s true) go to the career services center (or equivalent) now, since recruiting for summer can be starting already. Being a sophomore, there are fewer opportunities, but at the very least you’ll get the chance to develop your resume writing and interviewing skills.

  22. Rebecca says 27 August 2010 at 06:11

    If he’s on his university’s health care plan, I’d argue the time to learn about insurance is now. The plans range from pretty okay to truly terrible, and way, way overpriced. (The one I was looking at participating in limited coverage to $200,000 per condition and would not cover any injuries obtained in intermural sports- among other things). Cheaper, better coverage is often available on the individual market if you have no chronic health issues.

    If he’s on his parent’s plan, he still needs to know what’s covered, what’s not, and what the impact might be should he have a health emergency while in school. Emergency health care doesn’t come cheap- out of network coverage even less so.

    A basic understanding of the right levels of liability, etc. to carry for car insurance (should he have a car) is also better learned sooner rather than later.

    And if he has anything at all valuable with him at school (and is not living with his parents,) now might also be a good time to learn about renters insurance…Mine, at least, covers things (like my laptop) even when they are not actually in my residence. And given petty theft rates at your average campus- let’s just say it’s nice to have that kind of coverage…

    The best part about all of this is that he can (hopefully) learn a lot simply by talking with his parents about these issues- and not necessarily have to try to teach himself.

  23. Sarah says 27 August 2010 at 06:16

    Honestly, at 18, I wish I had known that debt is okay sometimes. I worked close to full time all through college so I wouldn’t have to take out loans (which was fine) and turned down a semester abroad (which I regret) because I couldn’t imagine borrowing the money to do it.

  24. Pamela says 27 August 2010 at 06:19

    I’d like to reiterate J.D’s point to get used to working. I worked during school and every summer which allowed me to pay off my limited students loans shortly after graduation.

    I also agree with AC about alternative education. I went into college with some credits from Advanced Placement Courses which whet my appetite for graduating early. During the summer, I took required courses (not in my major) at a local community college for much less. I graduated a semester early and took my last three credits by taking classes while traveling in Europe. Believe it or not, that was cheaper than taking the same 3 credits at my regular school.

    When you’re 26 and trying to buy a house, you’ll be in a much better place if you’re not drowning in student loan and other debt.

  25. Beata says 27 August 2010 at 06:24

    Check out your school’s financial aid office, or school of business, especially in the next few weeks. Many colleges (such as mine) have a lot of free intro to finance workshops in the first few weeks of the year to help incoming freshmen (and other students) figure out what to do with their money.

    Second, get involved with paying for school, especially if your parents are taking care of it. The reason I learned so much was because I had to be the one to take care of it every semester, since my parents don’t speak enough English to help and don’t know much about the U.S. system of education. The WORST thing you can do is just “let your parents take care of it”– help them find loans if you need them, read the terms, offer to take care of just $1000 a year of tuition yourself. Taking some responsibility will help you learn the system. You can always ask for help if you get stuck.

    Third, other than just reading all the websites and books others have suggested, try looking up information on anything you encounter but don’t understand. Keep a laptop with you (if possible) when you watch t.v., and if a commercial for a specific type of financial product comes on, google the terms you don’t understand. Read a little about what it is. This will help you build a vocabulary so that when you read an article about a company now offering “roth 401Ks”, you can put it all together.

    And lastly, be proud of yourself for taking the time to learn about your finances. The most difficult part is starting.

    Edit: I also agree about graduating early. With three classes of AP credits, a summer abroad, and overloading (which is free for me) the next 3 semesters, I am on track to graduate a full year early. Even the 7k that I spent on the summer abroad was worth it– unforgettable experience that ties into my career hopes (travel and art/architecture) and helps to save me about 25k that I would have to pay for a 4th year.

  26. smirktastic says 27 August 2010 at 06:24

    I’m in my *cough* late 30s now and went to HS in the 80s. We got NO personal finance education from school whatsoever. My parents did what they could, but I think most of it just never occured to them. I wish someone had told me then that credit cards are not necessary for a college student. As other commenters have said, some sort of personal finance ed should be mandatory for HS and college students. There’s just too much to know and too much at stake for society to just assume these kids will figure it out somehow.

  27. Colleen says 27 August 2010 at 06:26

    If your university has a Personal Financial Planning department (some do, some don’t), see if they offer a course for non-majors. The university where I work does, and it is really a generalized financial literacy course. If there is one and it will fill a requirement for an elective or something, that would be a good way to move forward.

  28. HollyP says 27 August 2010 at 06:26

    1.) Take a junior year abroad if you possibly can. Living and studying in another country is something you may never so easily be able to do again. The cultural experience and linguistic ability may help you in your career, too.

    2.) Go to the school with the best optimal value (balancing school’s rep against the debt you would have to carry to pay tuition.) Don’t pick the best without regard to cost, don’t pick the cheapest without regard to reputation.

    3.) Read Your Money or Your Life and take its lessons to heart.

    4.) Set up an IRA and start putting money in it now. Aim for 15% of all income. The habit of saving is so important!

    5.) Be mindful that a good used car is better than a new car, because you won’t be tied to a car loan. Taking a car loan out of college was the worst financial mistake I ever made, i think.

    6.) Never cosign a loan or get a joint credit card with a significant other, until SO has proven beyond a shadow of a doubt they are financially responsible.

    Good luck!

  29. Nicole says 27 August 2010 at 06:31

    Second the CNN Money 101 site. I think the Motley fool site may also have a book geared towards young people. DON’T get Suze Orman’s Young, Fabulous and Broke. It has some really terrible advice in it that has gotten my friends in trouble in the past (particularly the spend on credit until you make it).

    Use your career counseling office whatever major you choose.

    I do disagree with a previous poster. If you’re really into film studies, then sure, major in film studies. Transfer to a top film studies school if you can. Get film studies internships. And so on. If you’re in a directional school in the midwest, film studies may not be as viable a major as if you’re in a top school in Southern California.

    I went to a top liberal arts college and had friends majoring in all sorts of “useless” stuff, but with internships and career flexibility, they’re all making money in jobs, even if not jobs related to their majors. Don’t go into electrical engineering unless you *like* electrical engineering. Businesses hire people from different majors because of the way they’re trained to think, not for specific skills, except for certain majors. If you care more about job stability etc., then take that into account when you choose a major you like, but a humanities major isn’t the kiss of death if that’s something you love.

    If you can, work for at least a year before going to graduate school if you decide to go to graduate school.

    For graduate school, unless you are independently wealthy, be sure to research and think hard about the career prospects when you finish. A good heuristic is for non-professional school to only go places that give you full funding and a stipend. That is often correlated with career prospects once you get out. For professional schools (JD, MD, MBA, etc.), make sure your debt load is no more than the average starting salary once you get out.

    Don’t work so much that it jeopardizes your learning. Most students can handle 10 hrs/week; most cannot handle more than 20. What you learn in school is more important than minimum wage.

  30. Kate says 27 August 2010 at 06:32

    I agree with much that has already been said. I just wanted to emphasize the two things that were the most important to me:

    1) Pay off your credit card every month. Pay with credit because it’s easier than cash, not because you don’t have the cash.

    2) Student loans are ok as long as your major will let you pay them back in a reasonable amount of time. A philosophy major can afford less debit than an engineer.

  31. Another Dave says 27 August 2010 at 06:35

    I believe that reading the examples here and following such a blog gets an IMMENSE amount of first hand experience out for a Youth to take in. ALOT won’t be relevant until you go thru it. Then *blink* a little light will go on and you’ll remember reading about that situation. You’ll have a better handle on situations when they DO occur. There is alot of good suggestions above.
    You’ll want to talk to a professor BEFORE commiting to any Economoics/Finance classes. Most in my area are basic Economics (supply vs demand) and micro- “Marketing” classes. They did NOTHING for teaching responisible Personal Finance.
    Don’t be afraid to try things and make mistakes. That’s how we learn. Many of us are looking back thru rose colored glasses, and while we WISH we had done these things…. realistically it’s not always possible to “Save 20%”, “travel”, etc… that doesn’t mean you can’t try.

  32. Kate says 27 August 2010 at 06:37

    I have an 11…and a 12! Here goes:

    11. Totally agree with Nancy L.’s #3-sign up for any 401(k) plan any place you may work offers. I’d be surprised if you were offered one at jobs I would assume you would hold at this age, but it’s free money. You won’t miss it.

    12. Get the idea of ‘budget’ out of your head. There is no way you’re going to ‘budget’ (for many different reasons, none of which I will get into here). Instead of budgeting, focus on figuring out what you value spending money on. Spend $100 going out one weekend night…buy ridiculously expensive clothes…but only if these are things that you value. As you can see from my above post, I quickly figured out how much I value travel, and adjusted my spending accordingly…but I never ‘budgeted’.

  33. Carol S says 27 August 2010 at 06:40

    Nico should make sure he finds a credit union to use — it will be cheaper for the basics like checking. Many colleges are served by credit unions and if not, he should see if there is one in the community that he can belong to.

  34. eileen says 27 August 2010 at 06:43

    Nico is already on the right track – self-aware, asking questions and eager to learn. Oh, if I had only been so wise when I was 18!

  35. Becky says 27 August 2010 at 06:44

    Choose your friends wisely. It’s so much easier to fall into debt yourself when your friends are all putting bar tabs and iPhones on their credit cards.

    Invest in people whose values include curiosity about the world, good cheap fun, kindness to one another, and giving back to the community, and you’re well on your way to living a happy and responsible life.

    It’s easier to have a healthy relationship with money when your relationships with people are healthy too. I’m not talking about shunning people who have financial problems, of course; I’m just saying that we are molded by our friends as much as by our families — so choose to be close to people you admire.

  36. Ben David says 27 August 2010 at 06:46

    1. A dollar invested now is worth 10 or 20 dollars invested in your 30s.

    Google “compound interest” to see why.

    Whatever you are earning, put *something* away in savings every month. It can be just 5 percent of your monthly income – but do it.

    2. Your “income” is NOT what you earn – it’s what you have left over at the end of the month. If most of your salary goes to pay for expenses and indulgences – that is not “your” money, you have given it to others – and you may wind up very “poor” indeed at the end of the month.

    “Take home pay” is what stays with you – in your savings. Use this mindset to keep money from running through your fingers.

  37. Julie says 27 August 2010 at 06:53

    Go to a college you can afford and borrow within reason-no more than your anticipated first years income seems reasonable. Don’t borrow 100% of an expensive private education-especially in a low paying field.

    There may be exceptions, but if you are really that smart, then scholarships may allow you to go to an expensive private college for about the same cost as a public university. I see too many college kids financing 100% of their educations. We help our kids with tuition (and remind them we budgeted to allow for this) and expect them to work to pay for their room and board. They can borrow the federal loans with the lowest interest rate and no cosigners of $5,500 a year if they chose not to work and self fund.

    We explain that just as we save and pay cash for our cars, there is value in not going deeply into debt for undergraduate education. If they borrow to finance the medical degree after, that seems reasonable.

    We believe in a public university education where many of the brightest students and professors are. If they want more expensive private schools, then scholarships may offset. I think under grad is important, but save your borrowing for grad school. Working while in school offers experience. Get a degree, but within reasonable debt levels.

  38. JakeIL7 says 27 August 2010 at 06:54

    The one thing I am surprised no one mentions here: Make sure you get all the money you can from the government. This means filling out those nasty financial aid forms. Even well off people usually qualify for something.

    Some other items:

    If you get loans, make sure they are subsidized. That is, the government is paying the interest while you are in school. Some you avoid the issue Tom spoke of.

    At this point, school is more important than work. I’m not saying avoid work; I’m saying that your work schedule should not impact your grades. Odds are good that you can not work full time AND go to school full time. This is, of course, job and class dependent. I had a great job where I could study on the clock. Didn’t pay much but I got a check for studying 🙂

    Have fun. Never forget this. Have fun. This is one of the best times of your life. Have fun.

    Look for opportunities. There are many and most are only available right now, in your situation.

    Did I mention have fun?

  39. Nick says 27 August 2010 at 06:54

    I was very fortunate at Nico’s age because my parents and my scholarships covered my college expenses. However, I took a part time job which provided me with beer money and, more importantly, laid a foundation for post-graduation savings. So my advice for Nico is to try to find a paying job for at least part of your week. Also, try to take the courses you enjoy. Follow your passions, maintain connections (you’ll need them forever), and work hard.

  40. Jeff @ Sustainable life blog says 27 August 2010 at 07:08

    I wish I knew that credit card debt wasn’t required to become an adult. I honesty figured that if you had bills to pay, you became an adult. That was an expensive mistake, to be sure.

  41. AC says 27 August 2010 at 07:33

    @Dink Not all online options are from degree mill universities. Alot of private colleges that are brick and mortar are focusing more online in order to stay competitive with public universities by gaining a wider base. It is important to set yourself apart, but unless you graduated from Harvard or West Point; the major plus supplemental certifications matter more than the actual institution.

  42. Lyn says 27 August 2010 at 07:35

    With kids in college and graduated, I think the most important thing is to remember that it’s not a race and nothing horrible will happen if you don’t graduate in 4 years. If you have internship/coop opportunities, TAKE THEM. Not only will you be earning money for school/living expenses/savings, but you’ll gain valuable experience that will put you one more step ahead of the competition when it’s time to search for a “real job”. Sort of goes along with JD’s learn to work. And as far as the “never stick with a shitty job”, I couldn’t agree more, but you need to give it a good chance (like a couple of weeks unless it’s really heinous)

  43. Lana McGlasson says 27 August 2010 at 07:36

    I would advise Nico to open a Roth IRA as soon as he starts working, even during college with part-time gigs. Time really is on his side, and with the low earnings he will probably be making, getting the tax deduction one would have with a traditional IRA probably won’t make too much of a difference. If he doesn’t want to make too many decisions about his portfolio, he could always just select a target-date IRA through one of the big brokerages, then just “set it and forget it.”

    I only WISH someone had advised me about this stuff at Nico’s age!

  44. Beth says 27 August 2010 at 07:36

    ONCE YOU HAVE YOUR 1st job: START PUTTING AS MUCH MONEY INTO YOUR 401k AS POSSIBle!!! Don’t say “I’ll wait til I”m earning more.” DO IT NOW SO IT will grow into a million dollars by the time you retire. I SO regret NOT taking advantage of EMPLOYEE MATCHING when I was young. I put the max in now, but I wouldn’t have to do that so much now if I’d started earlier and let the magic of interest and growth increase that money’s value.

  45. Gwen says 27 August 2010 at 07:42

    I’m actually not too far off from Nico – I’m a senior in college. Here’s some things I’ve learned the last few years:
    1. Get an on-campus job. It is some of the easiest money you could hope for and they tend to be much more understanding when it comes to class obligations than another job. You won’t get as many hours, but it is worth it.
    2. Watch the stupid spending. I’d see my money dwindle away because I went to Steak ‘N Shake or did something fun but unnecessary with my friends a few times. Don’t be afraid to use coupons when you go out or say no to little expenses. Try to do free things with people. Also, budget for major expenses, like expensive hobbies (mine is videogames). And PRIORITIZE spending. For me, 10 coffees is not worth a new game.
    3. This might sounds weird, but ask someone to get you a coin jar as a gift. For me, there’s not a lot of big money going around (except that I pay my own tuition), but you will be shocked at how much change accumulates. My boyfriend and I started collecting our change for about 6 months and we ended up using it to pay for over half of a used Playstation 3.
    4. Always look for government loans (if there aren’t grants around). They are more flexible and have smaller interest.
    5. Don’t compare your spending to other people. My aformentioned boyfriend doesn’t pay his own tuition, his parent do, and so he has so much more spending and saving money than I do. Even though he’s responsible about money, whenever he spends I have to squelch a little pang of jealousy.
    6. One of the best things I did to cut down on spending was to mark with a sticker every book, game, movie, piece of entertainment I had that I hadn’t read, seen, or played through completely. Seriously, if you’re like me, you can find plenty to do with what you have.
    7. Also, get a high-yield savings account. Even if you only can put in a little, it will help.
    8. Last, learn to start looking for deals. Especially if you are in the market for something major like a new computer. Don’t walk into a Target or something, do your homework.

    I try to think of it this way: every thing I save I have for later, whether its to save for my post-grad future or spend on things I will really love.

  46. M.C. Sommers says 27 August 2010 at 07:43

    I think one thing to consider is your job. A lot of my friends worked as servers and made good money. However, when it came time to look for jobs after graduation, they didn’t have any real experience to put on their resumes. As a result, they had a lot of difficulty finding a job in their field. I worked different jobs as an editor (I was an English major) while in college. Sometimes I made $7 an hour and other times I worked for free. I graduated in 2008 and had several job offers in a pretty bad economy while a lot of my friends struggled for months and months (And once again, I was an English major! haha). While things were tight while I was in college and I sometimes had to work other jobs to pay for everything, the experience I got was worth way more than a higher hourly wage for four years.

  47. Meg says 27 August 2010 at 07:43

    I am 26 and recently out of college, but I feel like I have gained a lot of insight about personal finances in the few years I have been in the “real world.”

    1. Sign up for Even though you only have one bank account now, as you get more accounts and credit cards, you can add them to and see all of your accounts and their balances in one place. It shows all of the transactions, which you can categorize to see where you spend your money. You can also set budgets, so as you categorize the transactions you can see where you went over your budget.

    2. Get a part-time job during college, even if it is only a few hours a week. Check with your school to see what they offer for work-study jobs. They don’t pay much, but at least it’s some sort of income. My senior year of college I worked two part-time jobs around my class schedule. Yes, my days were busy, but it left money in my pocket and my nights/weekends free to still have fun with my friends and enjoy the college life.

    3. Open a savings account. Sign up for online banking (and with your checking account too, if you don’t have it already).

    4. Always do direct deposit with your paychecks. Most employers offer the option to deposit to more than one account, so have a set amount from each paycheck go into your savings and the remainder go into your checking for spending money.


    6. Re: credit cards – I waited until my junior year of college to open a credit card (when I was working, so I had income to pay the balance). Many credit card companies offer cards geared to college students that have a low limit so you can’t get too crazy with overspending. Mine was with Chase, and my first card only allowed me a $500 credit limit.


  48. shorty j says 27 August 2010 at 07:50

    good on Nico for starting to think about this now. I think that’s one of the best things my parents taught me–I started saving for retirement etc. EARLY, around that age, and it means I’m accustomed to it, in the habit of it, and it doesn’t stress me out. Just take $20 or whatever every time you get paid and put it away. I kept mine in a pickle jar for a long time, haha.

    I third/fourth/fifth the Money 101 site, it has cleared a lot of things up for me (and I was lucky enough to have parents who taught me a thing or two or seven about money).

    Another big thing is, do what’s right for YOU, and don’t feel pressured by what other kids your age are doing. A lot of college kids are stupid and/or lucky–they blow their student loans on stuff they don’t need, their parents help to bail them out, or they buy into all the credit card offers that get thrown at you when you enter college. I worked 2 jobs all through college and got scholarships; my friends used to rag on me because they’d be flying off to Vegas on the weekends or going on cruises while I was at work. But I got through college and grad school with zero debt, no student loans, and now I’m 26, multiple job offers, making perfectly reasonable amounts of money in my absolute dream job and I get to go on vacation whenever I darn well feel like it AND get paid in the meantime!

    (not saying you should be 100% boring like me, of course, but think about your own personal priorities–for me, being debt free and living a less exciting life was way more satisfying to me than anything else.)

    A lot of my friends are $80k or more in debt now, and some of them are just miserable–some are getting multiple grad degrees because they can’t make enough money to pay off their debts, so they just keep going back to school and getting more student loans. Some of my grad school friends spent so much loan money on having a fancy apartment or new laptops or whatever that once their parents stopped footing the bills, they then were stuck with literally NOTHING. I mean, my best friend has four computers, a really nice apartment, and no food. She is relying on her boyfriend, who makes $25k a year, to pay her $1000+ per month rent until her loans come through. It is a seriously vicious cycle.

    Do have fun, natch, because it’ll keep you sane, but don’t get sucked into keeping up with the Joneses–remember that just because the people around you are spending money doesn’t mean they HAVE it.

  49. PB says 27 August 2010 at 07:52

    Don’t get a car. A lot of students work very hard at minimum wage jobs, thinking that they are working their way through college, when actually they are supporting their car and its maintenance. Get a job on campus, where you can walk to work, rather than a job in town, where you will need a car to get to it.

  50. Jolyn@Budgets are the New Black says 27 August 2010 at 07:53

    I highly recommend J. Steve Miller’s “Enjoy Your Money” as incredible overview of financial principles. I’m going through it right now with my teenager and one of his friends and they are really enjoying it. It’s a very easy read in a conversational format and a perfect intro into finances for “kids” starting out and handling their own money for the first time.

  51. Kevin M says 27 August 2010 at 07:54

    1) Read Your Money or Your Life
    2) Spend less than you earn
    3) Avoid debt
    4) Question everything

    I agree with reading Ramit’s book, I think he is a good resource.

  52. Suzanne says 27 August 2010 at 08:03

    Nico, good for you for seeking out information and advice that will set you on the right path for a good financial future.

    My recommendation is to read The Millionaire Next Door. It puts spending into focus and helps you make the tough decisions on what to/not to spend your money on. Just because your classmates spend money in a certain way does not mean that you need to do the same!

  53. Kara says 27 August 2010 at 08:07

    I would second the people who are telling you to take some sort of personal finance/life planning class. If it’s not in economics, or your school doesn’t have a personal finance planning dept (or the like), then take (or audit) consumer math. When I took that class I had a Doh! moment. It’s one of those classes that should be required but isn’t.

  54. KMJ says 27 August 2010 at 08:09

    Is there any wonder people have a hard time navigating personal finance? Look at all of the information in the article and the response posts. And this is for someone without any money.

    Let’s try to keep it simple:
    1. Ask yourself if you could do without a purchase or if there are more affordable alternatives.
    2. Try to figure out what your most important goals and values are.

  55. J A Streich says 27 August 2010 at 08:15

    First, get health and car insurance if you don’t already have them. Get the highest deductible you can afford to pay out of your emergency fund (more on emergency funds later in this post) to lower your premiums. Shop around and be very clear what it covers, and how much it costs. If you have a cheap car, and a fully funded emergency fund, you likely only need good liability coverage. A car crash or major medical problem this early in life can have huge financial implications that may last for the rest of your life. The crisis of a medical emergency or car crash isn’t the type of thing you want to add a financial crisis on top of, and have adequate coverage could make a world of difference. Also, it is also a bad idea to have too much coverage and insurance products that ineffective, so do your research. Life insurance pays for debts owed, burial costs and replaces your income so your family can get by financially in their time of loss. I wouldn’t get life insurance (or maybe get minimal life insurance) at your stage in life, as you have no one, besides yourself, depending on your income.

    I disagree with JM completely about getting a credit card to “Build Credit”. You only need a FICO score if you plan to borrow money in the future. In fact I’d argue, now is great time to cut up and never use your credit cards again. I’d also suggest not taking out college loans, apply for thousands of scholarships and working instead.

    Pedigree isn’t as important as degree. That is, unless we’re talking about a degree mill, the local state or community college is just as good as big name schools a year out of the gate. If going to a cheaper school which would make my “you don’t need student loans” above really work. If however, you take loans less expensive schools will help to minimize the amount of the loan, and never take a loan for more money than you need.

    Make a budget. I know it doesn’t fun but telling your money where to go at the beginning of the month rather than trying to find out where it went at the end of the month will improve your quality of life.

    If you have debt, save $1,000 in an emergency fund, if you’re out of debt save 3 to 6 months of expenses in an emergency fund. That is money you keep in a savings account or money market account for a real emergency. Pizza is not an emergency.

    If you’re in debt, start paying down your balances. Pay minimum balances on all the bills, and put any “extra” money on either the lowest balance or the highest interest rate. Lowest balance will give you the momentum of “small victories” as you pay things off, which is generally better if motivation is a problem for you (and if you’re most people, it is). Highest interest rate is better for paying everything off as fast as possible (and thus costing the least in interest). After your done, bump that emergency fund to 3 to 6 months of expenses.

    If you’re debt free, and employed begin investing 10% to 15% into your retirement. Compound interest is amazing, and the earlier you start the more your money will do for you.

    That said, never invest in something you don’t understand. A lot of investment tools have complex systems and hangups. Educate yourself about the investment tool the bank, broker or insurance salesman is trying to sell you; most earn commission on what they sell and will try to close the deal as fast as possible so they can move on to the next client. Take time, and if you feel like what they are saying doesn’t make sense, hold off do more research and come back with knowledge in hand.

    The best way of investing for retirement is through Roth IRA or a 401(k) plan with matching. 401(k) plans are offered by some employers, and they allow you to invest pre-tax money up front and then only pay tax when you take the money out at retirement. The investments tools available inside a 401(k) plan are chosen by the employer or the employer’s broker. Roth IRA uses post-tax money up front, but you don’t have to pay tax on the money when you pull it out in retirement, they are offered at any bank and if you earn an income you are eligible to sign up for one. Because you can get an Roth IRA from a number of different places, each bank or brokerage firm will have different investment tools available inside of their Roth IRAs. It’s wise to shop around for a Roth that offers the types of investments you are interested in.

    If your company has matching, invest up to the maximum of the match (or 10% or 15% of income which ever is smallest) in the 401(k) – This has immediate return (i.e. the employer match) which is like “free money.” Then if you haven’t reached 10% or 15% of your income then continue in a Roth IRA. If you reach the maximum on your Roth IRA ($5,000 a year) then go back to your 401(k) and finish out the 10% or 15% there.

    Along those lines. Dave Ramsey’s “Financial Peace Revisited” and/or “Total Money Makeover” should be on the reading list.

  56. KMJ says 27 August 2010 at 08:15

    Also….the best life and financial decision I ever made was falling in love and getting married to the right person.

  57. Lynda says 27 August 2010 at 08:17

    Unlucky 13! Not entirely financial but not having backups of the important stuff can be a drain on time, potential earnings and energy.
    Have regular and reliable backups of college work, financial stuff, photos of belongings, important application forms… Just being organised may well set you apart from your fellow students.

  58. Jason @ Redeeming Riches says 27 August 2010 at 08:43

    The biggest mistake I made was wanting a new car so badly that I unwittingly stepped into a GM “Smart Buy”, which was basically a lease with a giant balloon payment at the end! I was driving around in a brand new car for a low payment and thought I was the bomb!

    I’d recommend working for 2 years before you make major purchases!

  59. Hannah says 27 August 2010 at 08:48

    I was in the exact same situation when I got a college internship, making good money for the first time. I knew spending it all or parking it in my checking account wasn’t reasonable, but I had no idea what the next step was. I read the entire archives of this blog, The Simple Dollar, and I Will Teach You to be Rich (plus the book, which I highly recommend). That gave me everything I needed to know.

    To my friends in the same position I have recommended opening a Schwab investor/checking account, using credit cards but never carrying a balance, and opening a Roth IRA if they have enough to begin saving for retirement.

  60. SF_UK says 27 August 2010 at 08:49

    My tips are part-financial and part-lifestyle (because as a student these are so intertwined as to be virtually inseparable). I am no longer a student, but I do work at a university, and have good friends who are students at different stages.

    Firstly, remember why you are at college. I’m hoping that this is:
    a) to learn something,
    b) to have fun and make friends,
    c) to become an independent adult
    Remember these. They are important. These are what will stand you in good stead for the rest of your life. Try to get some sort of balance (i.e. try not to either flunk your classes or be a library hermit!)

    Student finances are always tight. Don’t forget to make the most of any benefits. This includes bursaries, libraries (do you really need to buy that book?), scholarships, student discounts, low-interest tuition loans etc. The financial office staff are your friends. Ask them for help before you’re upside-down.

    Have some sort of budget, but have some flexibility. A cash budget can work well as a student (i.e. a set amount of cash per week, with any excess going into a “fun” fund). It’s a very easy way to start off budgeting. Be the person who has money at the end of term. Try to save, even just a little bit.

    Separate needs from wants. Do you need a car at college? Maybe a bike will do. Do you need a part time job, or would you be better working in the vac and studying hard in term time? There are no set answers to these questions, but considering them is important. There will be a lot of temptation in the form of peer pressure to buy the newest, shiniest Stuff (think iPhone/Pad etc). Resist it unless you really need it (or have saved up for it – even better).

    Think about what you want to do with your social life. A lot of student activities can actually be quite frugal. If you do want to get into an expensive hobby, try to stick to just one – it’s better for your finances, your time management and your studies! I know it seems a long way off, but you might want to consider how your extra-curricular activities will look on a CV. Some of the hobbies I started at uni have ended up as powerful sections of my CV, and definitely give me the edge in applying for jobs.

    Lastly, don’t stress too much. Enjoy yourself, try to keep your finances under control, make friends, and graduate. Merely the fact that you know to ask means that you are likely to be sensible and successful.

  61. Beth says 27 August 2010 at 08:55

    I was super frugal (read: totally broke) throughout college, and something I had a hard time learning afterward was that it was okay to spend money. When I graduated and got a “real job,” making a reasonable salary (twice what I earned as a student), I had to convince myself that IT WAS OKAY to spend some of that money to feed myself right, for example. In college, I was so poor I ate badly. After, it was hard to get out of that habit and start eating healthfully.

    This is just one example — others include: Being willing to spend some of my money to live someplace where my safety wasn’t in jeopardy. Buying the appropriate clothes for my job, instead of whatever I could find in free bins.

    I don’t think these things are lifestyle inflation. I think they *are* things that most college students take for granted, that many people who’ve been out of that financial mindset for a while don’t even think about.

  62. Phyllis says 27 August 2010 at 08:58

    When I was just out of grad school and working at my first “real” job, one of my collegues – my age and comparable education, already owned a car (older but reliable) and a home – both purchased with his own money, not his parents. His schooling was already paid for too while most of us were facing the impact of all those school loans on our hoped for lifestyles. One day I mustered the guts to ask him about money, about how he managed. It turns out he had parents who had taught him about money. He had saved 10 percent of every dollar he had earned or gifted since he was 16 years old. Twelve years later he was in a position to buy real estate when most of us were barely getting by. He worked through college, lived within his means, and always paid himself first. If you know someone who seems to know how to make their money work for them, approach them as see if they would be willing to share their knowledge. Even if it is all an illusion and they are drowning in debt – know that that’s an enlightening lesson too. (Just don’t do what they do – duh.) It’s easy to envy someone and all they seem to have, but if it’s all fake, who envies that?

    Do a little research on the future value of a dollar. What is will a dollar today be worth when you are 65, or whenever you hope to retire? Each time you go to buy something you want but don’t really need, think of it’s cost in the future, what it will cost you when you are 65. Is that soft drink or candy bar really worth it? Enjoy life, but make decisions consciously.

  63. Rachel B says 27 August 2010 at 09:03

    1. Hold down a part-time job, or two, especially if you’ll be learning different skills. Take your job seriously: show up on time, be respectful, etc so you’ll have good references.

    2. Work on campus during break. A lot of offices are understaffed: If you work half of your break, you can put extra money aside.

    3. Sell your books online. College bookstores rarely pay as well as online sites, which frequently credit you for shipping costs.

    4. Sell other kids books online. I made several hundred dollars selling my friends book (for a small cut) and selling books that I found in ‘free-to-a-good home’ boxes.

    5. Curb or eliminate “bad habits:” alcohol, cigarettes, drugs, coffee, binge eating, etc can eat up your savings pretty fast. During my senior year of school, I discovered that I was spending 1/4 of my work study salary on coffee drinks! Sleeping more helped my bottom line.

  64. Sweta says 27 August 2010 at 09:09

    1. I’m sure others have said it but definitely pay off your credit card each month.

    2. Learn to cook and enjoy meals at home. Ask your mom or grandma to teach you some recipes. Chick love guys who can cook. Learn to love leftovers.

    3. Check out some websites dedicated to helping young people with their finances like (they have 3 really good bootcamps sign up for all of them. is another good site.


  65. Steven says 27 August 2010 at 09:35

    JD hit it on the head with avoiding lifestyle inflation. There are lots of little things that problably fall under this category, but if you can learn to live happily on $2k a month or less (depending on area), and you keep that up for a while, you’ll be rolling in the dough without the pressure of having to make more than $40k a year or so.

  66. Lea says 27 August 2010 at 09:41

    The only advice I ever got about credit cards when I started college was a frantic one-liner from my mom, “PLEASE promise me you won’t get any credit cards!” There was no further explanation, and I’m pretty sure I rolled my eyes, waited for her to leave, and filled out a form at one of the many tables set up around campus to trick kids into getting a card.

    My advice is PLEASE don’t get a credit card!!! Until you understand what it means and how to use it correctly. Take a personal finance class in your school, and/or read one of the books recommended in this blog. It is a tragedy that children are not taught this stuff in public schools as part of their required basic education.

  67. Jen says 27 August 2010 at 09:47

    As a recent college grad (’08) with a ton of student loans, here’s my thoughts for your time in college and beyond:

    0. This isn’t even a thought, it’s a rule. Make money while you’re still in school. Whether it’s an internship, a research assistant/TA position, a convenience store clerk, a website developer… just find a way to do it.

    1. Like everyone else said, if you have a credit card, PAY IT OFF every month. If you can’t, cut it up. If you take on future debt, get the best deal possible. I did buy a car new last year, but for two reasons. My employer kept asking when I would buy one, and my answer was the same – I can’t afford it. Eventually, he gave me a raise so that I could buy the car. I did a ton of research, got the lowest possible price on the car I loved, and got 0% financing for the life of the loan. BE PATIENT and you might be surprised how things work out.

    2. Make a rough BUDGET now ( is an awesome tool to see where all your money goes). When you get a steady income stream, use this spreadsheet to plan for future expenses:

    3. When you get your first job, even if money is tight, set aside a big chunk of your income for savings. I pulled a figure of 10% out of nowhere when I got my first job for retirement savings, and had a fixed amount automatically transferred to savings in a different bank each paycheck. I would love to have the extra money for things like travel or shopping, but honestly, if you never see it, you don’t miss it so much. Also, if your employer matches, it is like an instant raise – take it!

    4. In addition to budgeting, watch your CASH FLOW. Use Google Calendar to make note of the due date and amount of every payment (student loan, rent, utilities, etc). That way, you won’t realize on Tuesday that your bill comes due on Wednesday but your paycheck isn’t deposited until Friday. (This assumes you are saving all of your “emergency” or extra money in a separate account that won’t be tapped for an overdraft – a good way to prevent “just this once” slip-ups)

    5. Finally, RESEARCH EVERYTHING until you are so bored of the topic you can’t stand to look at it. The more you know about the difference between Roth and Traditional, IRA and 401k, tax benefits, etc, the easier it will be to make the best decision for your situation.

  68. Sweta says 27 August 2010 at 09:52
  69. Natalie says 27 August 2010 at 09:54

    I work for the DePaul Financial Fitness program and our website,, has a lot of great resources for college students. While we can’t advise students from other colleges anyone can use our website or follow us on Facebook and Twitter to get relevant articles and information.

  70. Pat says 27 August 2010 at 10:08

    The American Institutue of CPAs (AICPA) has a financial literacy program called: 360 Degrees of Financial Literacy. The website is:

    The home page has a jumping point for 10 different life stages, including Tweens & Teens and College Students.

    There’s lots of resources here, too.

  71. chacha1 says 27 August 2010 at 10:15

    1. Never lease a car.

    2. Consider taking minors in topics that interest you personally, and majoring in something career-minded.

    3. Study things that don’t come naturally to you. Don’t pay for years of coursework that’s basically all reading: you can do that on your own for free.

    4. Don’t discount online learning. I know several people who have done U. Phoenix and they all said that they experienced more thoughtful discussion with their classmates, and more personal interaction with their instructors, in the online environment than in their previous brick & mortar classes. Sad, eh?

    5. Ultimately, skills and experience = career success. Multiple degrees without skills and experience = low wage work. Work a series of different types of part-time jobs. Work hard on communication and interpersonal skills. Learn to be self-sufficient as much as possible.

    6. Don’t routinely treat your friends to dinner, don’t loan them money, don’t buy stuff to impress a girl, don’t buy a round for the house.

    7. Have fun!

  72. Lindsay says 27 August 2010 at 10:20

    I’m a fellow college sophomore – i’ve already gotten myself into a crap situation with the student loans and the credit card debt (it has a good explanation I swear). I just want to THANK all you commenters for your input! You guys have given me hope for my financial future!!

  73. jim says 27 August 2010 at 10:32

    Get a decent major in a field that will get you decent pay. I’d take the ‘follow your passion’ advice with a grain of salt, most peoples passions won’t pay the bills. Find a field you like that has decent pay.

    Work hard at school and study so you can keep your grades up.

    Get yourself an internship or other job experience before graduation. That will help a lot towards getting work after you graduate.

    Avoid credit cards.

    Get yourself a copy of Personal Finance for Dummies.

  74. mike says 27 August 2010 at 10:49

    I’m not a big fan of the “do what you love” mantra, only because that line of thinking makes many people choose “temp” career paths while waiting for that big break into doing “what they love”. And in many cases, that “temp” job lasts a lifetime because that big break doesn’t happen the way the person wants it to.

    If I did what I loved, even today in my mid-thirties, I’d be touring the world playing rhythm guitar in a rock band. But at some point I had to be honest – the odds were against me ever making it big in that industry, and I know I’m not one of the better guitarists in the world, and I’ve got a family to support.

    As an engineer, I do a job that I’m good at but am not in love with, but it provides me a steady paycheck, flexible hours to spend with my family, and opportunities for worldwide travel. Not quite being a rockstar, but it’ll do.

  75. KarenJ says 27 August 2010 at 11:05

    I never settled into a career that paid a decent wage. When my husband left me after 14 years of marriage, I had a college education (in education) and few marketable skills. Had I known then what I know now, I would have gotten marketable skills that would allow me to make enough money to live on my own. It’s expensive to live here in NJ, and is all but impossible on minimum wage. Consider carefully whether you’re choosing a career that will pay the bills. It is important, especially if you’re planning marriage and a family. And if you’re female, make sure you have the ability to take care of yourself.

  76. Jen says 27 August 2010 at 11:33

    My mom gave each of us a copy of “The Wealthy Barber” when we graduated from high school. While I don’t remember a whole lot of it as high school was a long time ago…it stands out in my mind as a good place to start…a good place to figure out where you have questions so you can move on to the next level.

  77. DanaJ says 27 August 2010 at 12:06

    I know that it might sound funny, but register at a local department store. Right now, you’re probably living at home, on campus or with roommates. In a few years when you move out into the real world there are going to be a thousand and one unexpected things that you’re going to need to purchase.

    Most of my friends spent thousands of dollars in the years after they first moved out on their own because they didn’t have the stuff they needed for their home. However, over the last few years of high school and university I received as gifts almost everything that I needed to move out on my own.

    Your family will really appreciate being able to give you something for your future. Plus, it’s a lot easier to feel like a grown up when you have matching dishes, basic tools, linens and lamps!

  78. lawyerette says 27 August 2010 at 12:13

    Think about a career that won’t get outsourced. Vocational occupations, which Americans have been looking down our noses at for the past 20-30 years, now seem to be the way to go unless you’re going to go to Harvard/Yale/Princeton/Stanford and be at the very top of the food chain. The days of getting an accounting degree from State U and getting a solidly middle class office job are over – that work is going overseas where it can be done cheaper.

    There’s a lot to be said for learning a skill like, let’s say, how to install and service HVAC systems. That can’t be outsourced to India.

  79. Dink says 27 August 2010 at 12:27

    You know, it’s kinda sad in here with people downplaying “do what you love” and “following your dreams” in favor of something more career-minded. I’m of the opinion that if you don’t do what you love, there’s no real purpose to living. If you find that doing what you love entails getting married, supporting a family, and investing in a long-term career… fine, do what you love. If doing what you love entails some sort of artistic endeavor that will yield very little financial returns, understand you may be poor throughout your life, budget accordingly, and do what you love. If we lived in a world full of painters, life would be a bore… if we lived in a world full of engineers, life would be a bore. It’s having a mixture of people that makes the world an interesting place.

    Do what you love.

  80. mike says 27 August 2010 at 12:58

    @76 Dink, who said “I’m of the opinion that if you don’t do what you love, there’s no real purpose to living.”

    The “Do What You Love” statement in J.D.’s original post was focused solely on career choices. A career is a means to an end for many people, providing the financial means for having a life outside of work.

    Sacrificing a job that I love for a better paying job that provides me the financial and schedule freedom to focus my energy on my family, friends, and hobbies doesn’t seem like a bad trade off. Because it is those non-work things that provide the purpose to living.

  81. Kim says 27 August 2010 at 13:28

    1. Build an emergency fund that you truly reserve for emergencies. Holidays and vacations are not emergencies.

    2. Find a budgeting tool and use it. YNAB is my favorite, but there are many to choose from– look at them and decide what one will work for you. is good too.

    3. As soon as you can, I recommend saving up a month’s worth of expenses and then use that in the current month while setting the income you are earning toward the following month. This way you always have a month’s income in your checking account. You’re living on last month’s income.

    4. You should work to earn some money even while you are in school.

  82. Rob Ward says 27 August 2010 at 13:32

    If he just keeps reading as much information he can related to both personal finance and his career, he should be all set. At some point of course he will have to make up his mind about specifics since some peoples advice contradicts with others. But overall, just keeping himself informed (the fact that he emailed J.D. is a good sign) should do the trick.

  83. Ashley says 27 August 2010 at 13:40

    Hi Nico!

    Good for you for trying to learn more about finances at such a young age! I did not know much about finance at your age but my mom and older brother were always good about talking to me about money until I got the hang of it. Here are some suggestions they gave me and others I have picked up over the years:

    1) Do not get a credit card until you have a job. I didn’t get a credit card until I was 22. I waited tables every summer to cover my living expenses while I was in school and used student loans to cover tuition.
    2) Make a habit of getting your credit report every year – I always check it on my birthday.
    3) Use to help you make a budget, manage accounts, etc. – it’s a one stop website and it’s fabulous!
    4) Books: I like “Get a financial life” by Beth Kobliner and “Young Fabulous and Broke” by Suze Orman
    5) I really liked psychology in undergrad but it’s not a very lucrative field to go into. So I continued on for my master’s and PhD. Don’t be afraid to stay in school a bit longer to get a degree in a field that you love but that will also allow you to live the life you want.
    6) Set aside money for an emergency fund.

    Best of Luck!

  84. reeder says 27 August 2010 at 13:44

    Good points. Majors which have job prospects are important. College is an investment in future earnings and while some people choose to see it as a time to gain fun life experiences, just be sure you get a return on your investments. There’s risks and tradeoffs in college as well. Doing what you love doesn’t mean you can’t earn money but be sure you know what you love so you can major in it and really want to use that love to support yourself. If you haven’t figured out what direction you want to go in or what you love (and a lot of young adults don’t) , then be smart and purposeful about what you choose. Indecision and aimlessness at this point in life isn’t cheap.

    Surround yourself with financially responsible friends. It can be easy to pick up bad financial habits or be goaded into spending what you don’t have if your friends don’t help support you. Or worse, help you spend your money on things you don’t care about.
    If someone makes fun of eating at home due to budget, or occasionally renting from Redbox/Netflix instead of going to a Friday night movie, they might be unflexible and not considerate.

  85. Kathryn says 27 August 2010 at 14:37

    I’ll add a book to the list: The Millionaire Next Door. It’s fascinating and very inspirational, the perfect book to fire up someone’s motivation to be savvy with their finances from Day 1.

  86. Quijybo says 27 August 2010 at 15:01

    Make sure you learn a language at school, and a useful one! The doors that will be open to you in pretty much ANY career if you also speak Spanish, French, Chinese or Japanese will be epic. Right now, I work in IT in a big ad agency. We’re expanding all over the world and technical people with language skills get to travel on the company dime.

  87. JL says 27 August 2010 at 15:13

    There are a couple of things I’m really glad I did starting out at 18. I lived with my parents and went to community college for two years to get the basic courses, and waited to declare my major when I transferred. Community college is a bargain if you pay in-district. Also, save as much as you can for the future. Use those student discounts.

    Do an internship before you graduate. I wish I had been more thoughtful about my internship. It would be wise to choose an internship at a company where you’ll learn a lot, get paid or possibly be offered a permanent job at the end. Hopefully, all of the above. I went through college thinking I’d do everything that sounded fun to me and it would all work out, from my major/minor to studying abroad, and it hasn’t led to a path of success for me.

    I just skimmed some of the last posts and saw something about doing what you love. That sounded very romantic to me when I was 18. I think if you’re passionate about something and you know it, do it. Otherwise, do something you really, really like AND that will make you a decent income. I think it’s important to give equal weight to enjoyment and potential income.

  88. JL says 27 August 2010 at 15:27

    I remembered a couple of other things. I would’ve opened a Roth IRA when I was 20 like the financial advisor told me to do. Also, find out about scholarships on campus. I found out about scholarships that were not given out at my school because no one was applying. I applied, wrote an essay and got a scholarship for 2k.

  89. KS says 27 August 2010 at 16:44

    1) Look for scholarships. There are a surprising number of small scholarships that are not widely advertised. is an excellent search engine for these. As a grad student, I worked on campus in a scholarship resource center where we helped students find some of them – I had students apply for (and win!) scholarships for bowlers, descendants of Hugenots, even redheads. They may be $500, $1000 there, but it adds up. Look early – many of them have deadlines 6-8 months out. Have someone look over your essays (yes, some have essays). And whatever you do, don’t let someone sucker you into paying for this kind of service. Start looking now for junior/senior year.

    2) To reiterate what Jim (#73) said. Keep your GPA up. A 3.0 or even a 3.5 is the minimum for many scholarships, internships, and interviews. Maximize your chances.

  90. Pete says 27 August 2010 at 16:59

    I wish I had developed my cooking skills at 18 instead of just now, when I’m 31. Home cooking from scratch is a major money saver.

  91. Nico says 27 August 2010 at 17:19

    Wow, these are a lot of responses… thanks! I REALLY appreciate all of your advice. Definitely going to get a job and look into a lot of the resources you guys have brought up ASAP.

    A little more insight into my situation: I’m actually set for now as far as paying for school (which is a well-respected state university) with scholarships, grants, and GI bill money (but I do realize now I should probably look into more just in case).

    I’m honestly astounded as to all the help you guys have given me; I’m not quite sure how to express my gratitude… it’s crazy that a group of strangers on the internet spent the time to help me out like this, but once again, I appreciate it.

  92. ladykemma2 says 27 August 2010 at 19:50

    i wanted to add: don’t get a useless degree.

  93. Sunny says 27 August 2010 at 20:16

    Don’t buy a brand new car. Always buy used and let someone else take the depreciation hit. Don’t charge anything that can be consumed before the bill arrives. Shop Craigslist, thrift shops, flea markets and yard sales. Be creative in finding solutions to your wants and needs. Travel any chance you get and talk to the people sitting next to you on the train, plane or bus.

    Oh and don’t take yourself too seriously.

  94. Lainey says 27 August 2010 at 21:07

    I’ve only read up to comment #83, but here’s my two cents:

    1. Save whatever you can.
    2. Don’t co-sign anything for anyone.
    3. If it sounds too good to be true, it is. No, really.
    3.a) If anyone mentions the words “Amway,” “Quixtar,” “American Income Life,” “Isagenix,” or any other sort of scammy money-making idea, run the other way. Seriously. MLM (Multi-Level Marketing) usually means “scam.” They’re more like cults than anything else. I mention these becomes it seems like far too many people encounter these with promises of all your financial dreams coming true.

  95. David/moneycrashers says 28 August 2010 at 03:57

    I’d say get a part time job. It will make you some money and one thing to realize–when you’re working–you’re not spending money.

    Also, you may end up finding something you really like doing, which could help when making future career decisions

  96. AP says 28 August 2010 at 08:43

    My opinions:

    1) Don’t get a credit card. In the days of debit cards, you don’t need one. Get used to saving for what you need and keeping your spending limited to what’s in your account.

    2) Start now with tracking your account regularly – balance your checkbook, don’t use the ATM as a balance checking method. KNOW what’s in your account at all times; don’t guess!

    3) Hang out with people who will help you keep on track – friends who enjoy saving, people who know where the good deals are, people who aren’t afraid to shop Goodwill… My sisters-in-law and I used to encourage each other to purchase things we didn’t really need (shopping therapy). It was a bad deal all the way around.

    4) Explore as many job options as you can – talk to people, visit offices, job shadow, go to meetings. Find out what you love because doing what you love makes it all worth while. It’s important to be realistic about where you want to end up – my degree is in a field where the really good jobs were on the coasts. I’m from the midwest and wanted to stay there so needed to modify my expectations about what kind of job I could expect in my area.

    5) Enjoy your college experience!! It doesn’t have to cost a lot to have fun.

    6) Get in the habit of saving now. If you can save some every month and spend less than you earn, you’ll have it made!

  97. Jaime says 28 August 2010 at 12:12

    Wow this is a lot of advice. Honestly how I started with PF is I started reading basic books such as “Your Money or Your Life” -read books about basic personal finance first.

    Once you read those, you can move to investing and retirement books. You gotta start somewhere, it doesn’t matter if you’re 18 or 40, the same advice works at any age.

    Although I gotta disagree with you J.D. about Ramit’s advice. Ramit believes in conscious spending, that is similar to frugality isn’t it? He tells people to skimp on the things they don’t care about and spend on the things they do care about. That’s basically what frugality is.

    Like the lady from the tightwad gazette, she was very frugal because she had a dream of living in the country, so to me that seems like conscious spending.

    We’re frugal in our lives because we have bigger goals. I hate the word frugal but even I have to admit that I practice frugality otherwise I wouldn’t have accomplished any financial goals.

    Of course if you want to make a post on the differences between conscious spending and frugality, I’d like to hear that but to me they seem like the same things. 😀

  98. Nicholas Rothacher says 28 August 2010 at 12:12


    I love Get Rich Slowly, too. But it IS complicated and directed toward adults. Take a look at a college finance blog I’ve been working on over the past few months.

    My goal is to help college students and their parents save money and graduate with healthy finances.

    I would love to have Nico, or anyone, check it out as well and leave feedback. Cheers.


  99. Jessica says 28 August 2010 at 20:02

    WOW. I am 18 and starting college in a week, I’ve worked almost full time for minimum wage all summer and wish I had seen this sooner. Thank you so much to everyone who posted on this all your tips and informations were so helpful!! We really are at the right point in our lives to be thinking about all this finiancial stuff that most of our friends don’t think twice about yet so thank you all so much this was so helpful.

  100. Danielle says 28 August 2010 at 23:31

    I am a 25 year old college student (school, job + savings, back to school… long story) and boy do I wish I knew about all the resources available to me back then. Good for you for starting early!

    Lucky for me I have 1 parent (divorced) who is so bad with money that I have been scared into financial responsibility from a young age. Was I perfect? Hahaha.. but I am doing better than 95% of my friends are right now so I guess I am doing something right?

    Here is my advice:

    1. GET A JOB! – 2 shifts a week is all it takes. I have friends who just graduated from college without ever having a job. Result? No work experience so nowhere will hire them. Some had problems even getting an internship! Try for customer service jobs. Employers value people skills more than flipping burgers.

    2. BUDGET! – Cant teach an old dog new tricks so it is best to start young. Add up your monthly expenses such as rent/insurance/cell/gas/etc and divide by 2 or 4 (depending on weekly/bi-weekly payday). Put this money in savings and no touchy! Once you can live on that budget a certain % for an emergency fund and then % for savings. The rest is your “fun” money. As others have said: pizza, ipods, and clothes are “fun money” and NOT emergencies!

    3. DEBIT, CREDIT, or CASH?

    DEBIT- I am a die hard debit card user. My credit union has detailed (free) online banking. I check my online bank statement in the morning and at night and go over my spending. Think of it as an instant virtual slap in the face about your spending habits. It hurts for the best.

    CASH – Some people just cant be responsible enough to respect the plastic and do better with cash. Try and keep bigger bills on you. Breaking a $5 is less mentally painful than breaking a $20. $1s are dangerous. That can of coke is “only $1”. $7 a week, $30 a month. It adds up.

    CREDIT – Many say don’t get a credit card, but I disagree. If you are responsible college is a great time to build credit (unless you have some serious control issues… if that is the case, these are not the droids you are looking for…). Not building credit early is the BIGGEST regret I have. Good credit means better rates when buying a house or a car. Do your research first. Consider a student, or if you have to a secured card.

    More about credit-

    *Do NOT apply for a credit card on campus. It is like selling your soul for a candy bar. Every time you apply for a credit card they run a credit check, which “pings” you. Too many pings hurts your credit score. Not good. Friend did that at every kiosk that offered something free to sign up when she was 20. This was 7 years ago and her credit is still recovering! The same is true for store credit cards. Do.Not.WANT!
    *Pick a required expense, such as gas or cell phone bill and put it on the credit card. Pay off the card at the end of each month. Repeat.
    *Do NOT use your credit card to buy “fun money” purchases. No clothes, no ipods, no pizza. This is why you have your debit card of cash. Don’t even think about it mr.!

    4. EATING/DRINKING – This is going to be the weird random one from one young person to another.(Part of this only applies to you on/after your 21st birthday!) The young person’s life revolves around being social. For a 20 something this normally involves dinner and/or drinks with friends. It is expensive! So much money can be saved if you plan ahead!

    *Eating – Going out to eat is a much needed social experience but NEVER go out to eat starving! Just like you don’t go shopping when you are hungry you never want to experience the whole “eyes bigger than stomach” thing while dining out. Have a snack an hour or so before you meet friends for dinner. This will help you avoid ordering that $8 appetizer! Also, try and order things that reheat or are good cold. LEFTOVERS! Also, water is free. It is good for you! Coke is $3. Go buy yourself a 12 pack and have one when you get home.

    *Drinking – Most 20 somethings drink. It is a very expensive part of our lives. It is a social event to help us forget about school and work. We like bars. Unfortunately $5 for a beer is highway robbery! NEVER go to a bar completely sober (when you are 21+ & no drinky + drivey!). Have a drink or 2 at home and then have a beer at the bar. You will save TONS. Also, bring cash to a bar. Only bring as much cash as your sober self would like to spend. Alcohol impairs judgment. Sober you will thank drunk you for not spending. Drunk you will thank sober you for being smart enough to make sure you can afford the advil to take care of that hangover the next day. It is a win win.

    Put all that saved food and drink money towards something that will last.

    5. BOOKS – Buy used whenever possible. Check online first because campus stores are normally a ripoff. Try and sell the books back online, even if they have released a new edition. Most student book stores on campus will only give you 1/2 of what someone online will be willing to give you!

    6. CARS – Buy used and reliable, but not “cheap”. New cars lose tons of value when you drive them off the lot. Don’t buy a “cheap” used car on it’s last leg. Think Goldilocks – not too new, not too old, juuusssttt right! Save up as much money as possible. Pay for it in cash if you can. If not, save up at least 2/3 before purchasing and do your homework!

    And whatever you do: AVOID parking tickets, speeding tickets, registration fines.. may as well light the money on fire! Or if you do not want it I will give it a nice home and save you the trouble. 😉

  101. starshard0 says 29 August 2010 at 03:36

    I’m only 21, and just a few years ago I was in a similar situation, with the exception that I ran out of money trying to live on my own and joined the Army.

    One of the things I did shortly after leaving basic training however was start reading PF blogs. I started with Wisebread on the recommendation of a friend and branched out from there, eventually finding Get Rich Slowly and others, like The Simple Dollar and Lazy Man and Money.

    My advice is to absorb as much information as you can about finances and put it into action. I started investing as soon as I understood what it was and how it worked, and I kept my expenses low by only rarely going out with friend and spending most of my time in my room and eating at the chow hall.

    Scrimp and save as much as you can now, so you can spend it on what really matters later. To me, that’s early retirement. To you it might be something completely different but just as awesome.

  102. Rolf Ingermann says 29 August 2010 at 07:24

    As a father of kids about this age, I agree with and appreciate the advice given. However, as a prof and pre-med/pre-dent advisor at a univ, I do have a concern. I can’t speak for other professional programs, but the initial cut for students applying to medical or dental schools is generally based on a student’s grades in their first 3 yrs of college and test (MCAT, DAT) scores — other wonderful accomplishments (inc high grades in grad school) are not considered at the initial cut. My caution to students is to keep grades up! If having a job (or playing athletics or having LOTS of fun, etc) compromises their grades, students may find they can’t get into the type of professional program that opens the doors to a rewarding career they’d love. One of my advisees told me that she’s certain her GPA would have been at least a 3.5, rather than 3.24, if it weren’t for her 25 hr/wk job — she didn’t make it into med school. It’s not easy but students need to keep their long term goals in mind and that includes keeping grades up.

  103. HKIA says 29 August 2010 at 08:36

    As savvy as I think I am about finance now, there’s not much advice I wish I had given my 18 year old self a decade ago. I lived frugally, worked several jobs and got a good education. The only big mistake I see is that I shied away from taking on any debt, including government-subsidized interest free loans. I did some quick math on my blog, I would have graduated $2723 richer at no risk had I done that. The details and math are at if you’re interested. Of course we’re in a different interest rate environment today but an interest free loan is an interest free loan and a rare opportunity. Don’t pass it up if you can.

  104. Jared says 29 August 2010 at 09:28

    Two mistakes I made:
    1) I got and used a credit card: I agree that it’s important to start building credit, but it’s not so difficult that it can’t wait until after you’ve graduated (and find a job). I would avoid them entirely, if possible.
    2) I assumed I would get the job I wanted right out of school: I majored in accounting and thought that my slightly above average grades and complete lack of experience would land me a 40k+ public accounting position right out of the gate (this was in ’05). I was wrong. Rather than interning or volunteering for jobs that would give me some experience (however little) in my intended career field, I took unrelated jobs so that I would have enough spending money. Granted, I always had enough for pizza and beer, but when it came time for interviews senior year, my slightly-less-well-fed peers, who had, for example, volunteered their time to help others file their taxes, had a distinct competitive advantage. In the end, I had to take less pay in an unrelated field to gain some experience before I was ready to apply for the jobs that my college peers were already being promoted from. It set me back about two years. Lesson learned: time, like money, should be invested with both short and long term horizons in mind. Invest wisely.

  105. Itinerant says 29 August 2010 at 09:37

    Looks like most of the big stuff has been covered, but I’d like to share a few more resources/tips that are particularly helpful when starting from square one–

    1) PBS recently put together a “Your Life Your Money” website targeted at young adults in the 18-22 age range. The site includes videos, games, and online tools/resources to help you learn the basics

    2) I second learning how to cook. My cooking Bible when I left college was “Help! My Apartment has a Kitchen!” — the authors literally walk you through everything you need to cook basic (but tasty!) meals (including “Mom Tips”!).

    3) BUY USED BOOKS — talk to upperclassmen, check out, figure out if copying the material is cheaper than buying the books, etc. You can save a couple hundred bucks each quarter/semester this way.

    4) Apply for on-campus jobs / summer internships that give you the opportunity to gain transferable skills: e.g. leadership, working with others, independent research, writing, etc. Those kinds of positions will keep you competitive for full-time positions post-graduation.

    5) BUILD YOUR NETWORK: Particularly when looking at internships, consider how it will help you build your network. Your fellow interns won’t be college students forever and, thanks to fb, it’s much easier to stay in touch with them later on. While not all of my internships were high-paying, my internship alumni networks have helped me think through graduate school applications, provided job leads, etc. So consider the people factor — and build a reputation as an intelligent, reliable, and hardworking person so that your network people are willing to recommend you to their friends/colleagues!

    6) Check out the psychology department to see if they are running any short trials that you qualify for. It’s a really easy way to pick up $15-$20 here and there for 30-60 minutes of your time.

    Good luck and kudos for getting on track early!

  106. Larry says 29 August 2010 at 11:42

    I think the most important thing for somebody that is just starting out in life to understand is to keep your expenses low. I mean rock bottom low. I mean consider alternatives to renting an apartment, or buying a new car. Decisions that you make now, will definitely “compound” for good or bad down the road.

  107. Rachel says 29 August 2010 at 12:37

    Although I agree that learning a good work ethic is valuable, I also think that it’s best to go easy on the part-time jobs while in college. Therefore, my most pertinent advice for Nico is to learn how to study most effectively. (The website Study Hacks is very helpful!). Learning to study = getting good grades = scholarship money. Student debt can be a millstone around your neck – best to avoid it. On the same note, apply for every scholarship you qualify for. Lots of people are lazy and don’t bother, and if you can write a reasonably convincing application and have good grades, there’s tons of money out there for you.

    In addition to the basics section of this website, there are several great personal finance books aimed at young people – I liked Suze Orman’s “For The Young, Fabulous and Broke” and Ramit Sethi’s “I Will Teach You To Be Rich“, both which focus on beginning your financial life on the right foot.

  108. Carrie says 29 August 2010 at 14:51

    I’m kinda late to this discussion, but here is the one thing I did right financially in college:

    Get a credit card with a really low balance. Mine was $500. Use sparingly, and never miss a payment. By the time you graduate you’ll have a credit record and you won’t have enough rope to hang yourself with along the way.

  109. NTrick says 30 August 2010 at 00:34

    1. read The Wealthy Barber – easy to read and easy to follow
    2. live like a smart student for as long as possible – it leads to an excellent entrance into your 3rd decade and keeps your priorities clear
    3. open up a ROTH IRA and make it happen – it is insane (!!) how quickly those small monthly payment build up
    4. have one credit card and pay it off EVERY single month – good credit history = discipline and fabulous interest rates later in life


  110. CathyG says 30 August 2010 at 08:18

    For every person who has recommended a book, my advice is that the book is probably available in your library. If you read it and love it and want to keep it to reread and mark it up, then you can go out and buy a copy.

  111. Arlene says 30 August 2010 at 08:39

    Many of you expressed regrets for not having financial education in high school. If your local school has an interest in offering this but needs materials, I’d suggest the curriculum developed for a course called Dollars and Sense. It covers everything and is aligned with the national personal finance standards. The materials are for the teacher and give many strategies and resources. You can view an outline of the course at It is available through a subscription; it isn’t free, but it’s close to it considering what the teacher gets. Contact information is on the Web site. How did I know about this posting on Get Rich Slowly? One of the lessons encourages students to sign up for this blog to help get them started on the path to get rich slowly.

  112. Melanie says 31 August 2010 at 13:55

    1. Balance institution cost with the career field. Getting an undergrad philosophy degree from an ivy league school probably isn’t an investment – you will never earn that money back in a field like philosophy. I LOVE the liberal arts; I have two degrees in the humanities, but I chose schools that paid me to get those degrees (through scholarships and assistantships). There are some fields in which a “big name” will do you a world of good as far as making connections and launching your career and may be worth the price of a premier institution. If your passion lies in a less lucrative field, consider a quality institution that may not have the name recognition – and price tag – as some popular universities.

    2. Internships, internships, internships! Washing cars at your local dealership may put more cash in your pocket, but interning with a business or government organization can provide you with experience and connections that will make your transition into the career world much easier.

  113. Caroline Crouse says 07 September 2010 at 05:53

    Try to always live on the same amount of money as you did the year before- put raises right into savings. I definitely did not do this and it is much harder to start living more frugally than to just live frugally to begin with!

  114. Mario says 12 February 2012 at 16:05

    Firstly, thank you Nico and the owner of the site( my first time coming accross this site) for bringing up the question and the plentifull answers.

    I’m 19 and currently travelling in s.america before going to university september 2012 – I’m from London.Nico, I would say try to travel outside of western countries or if youre on a budget(like i am), spend time with people who have different ideas about money to yourself.

    Okay so Nico being a similar age to yourself I’ll recommend the following books which I’ve read to help me forms ideas about using money successfully up until this point(still improving, everyday), so here goes:

    1.’rich dad poor dad'( general finance management and also briefly touches on the idea of how to sort of avoid and even escape a financial trap most adults seem to fall into or be in)

    2.the book of someone who you think is a success with money i.e. i have lots of british business peoples’ books like richard branson, alan sugar etc – I know americas big on business not just like any other country but also the idea which ties in with ‘the american dream’, which I think is really cool btw, so that should be easy.

    I will only say one more thing because I feel the respones have been so brilliant and v.informative – and that is, its that although I’ve recommended you books and others in this thread have also too, I will say the cost of whatever book you buy might be expensive(though amazon and ebay offer) bargains, mostly anyway lol)and if you despise reading – its worth it in the long run and no I’m not talking about when we get to 30 with a wife and kids but that may be 24hrs/ a week later/ a month later etc.

    So yeah thats it -again thanks so much to everyone who has posted stuff!

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