My Millenial Money Mistakes

When I was in high school, I was a competitive athlete. I ran cross country and track, as well as skied for our nordic team. I was by no means a Division 1 caliber athlete, but I was good enough to be All-Conference a few times, and was able to attract the attention of a few small, Division 3 colleges. These colleges were all in Minnesota, but because they are private, I would not benefit from any sort of in state tuition. Which leads me to mistake #1. Please keep in mind that we all make mistakes, and all we can do is take that knowledge and move on. I am in no way perfect, far from it actually, and like most of us I wish I could go back and change some things about my life choices.

Mistake #1: Going To A Private School

This may have been a misleading title. I actually loved my private college, but what I really meant was that my mistake was paying a premium for a degree that I could have easily obtained for thousands less, or at the very least working harder for scholarships. While I certainly enjoyed my time at Gustavus, the current sticker price per year sits at just over $50,000 per year. With most private colleges in the area, if you are relatively intelligent you can usually get a pretty substantial discount. In my case I had some decent scores and essays and they granted me a $20,000 scholarship per year. This brought the actual cost down to about $30,000 per year, minus extra living expenses such as textbooks and food. While this was great, I was under the illusion that this was similar to the cost of attending our largest public school in-state (University of Minnesota). After some basic research after the fact, I came to the realization that out of state tuition was just over $30,000 per year, but in state tuition was just over $15,000. I think I chose not to see this fact because I enjoyed my time at the college. On graduation day I walked across the stage to the tune of $58,000 in student loans, split down the middle by a private loan and a federal loan. More important than that, when I saw the numbers on the online statement, the realization didn’t hit me. It wasn’t until that first payment rolled around after graduation, and that money left my account, that I truly felt the sting of that debt.

Mistake #2: Not Being On A Budget (Living Paycheck To Paycheck)

One of the biggest and most pivotal mistakes people make is not being on any sort of budget. While this is the most important step, it will also make the biggest and most efficient change. Now I know, I said the horrid “B” word. But after a little bit reading and understanding, budgeting is really like guilt free permission to spend.

In high school I worked various jobs, from my first job at McDonald’s, to liquor store cashier, to summer day camp counselor. While I worked these jobs, I saved a little here and there, but only for it to be spent on fun and frivolity. While I was in college I had a work study job, but that was just enough money to cover new running shoes and booze. Partying was the priority.

This gave me a taste of what “paycheck to paycheck” looked like, but without the true fear I should have had. Shout out to my mom and dad for those random deposits in my bank account…

Overall, when I did have money, I was looking for a way to spend it, not thinking about the crushing loan burden that was hanging over me like a dark cloud.

Even after getting my teaching job in Moorhead in the fall of 2017, I had no system in place for where my money would go. Sure, I took advantage of the 3% 403(b) retirement match, but other than that I didn’t have a plan. I didn’t start budgeting with intention until I became frustrated with my situation. After making a couple months of minimum payments on my private loan, I saw the amount of interest I was paying per month, and it infuriated me. After a bunch of Google searches and Youtube videos, I discovered this crazy man named Dave Ramsey. If you are unaware of who Dave is, simply start by Googling “Dave Ramsey Baby Steps” and go to Google Images. My parents actually taught his financial classes at our church, but I was none the wiser.

After doing some deep dives into his principles, I downloaded his budgeting app called EveryDollar. I have created a flowchart explaining how to download and use it, as well as the specific categories within my own budget, which can be found here. The best part about this app in my opinion is that you can go back up to two years, and see how your spending and saving has changed. Right now I can go back to my EveryDollar Budget app and see exactly how much I spent. For example, I can see that for bars and restaurants in May 2018 I spent $250. In June 2018, it was $450, and in July 2018 it was a whopping $630. That last amount right there is almost $200 more than I spend on rent in a given month. Simply by using this app, I have been able to think long and hard about what my priorities are, and spend accordingly. The biggest takeaway in terms of using a budget is that when you know where the money is going, you begin to have a greater sense of control in your life. Think of it like a tax-free raise!

Mistake #3: Being A Regular At A Bar

This one is pretty self explanatory. As someone that moved 4 hours away to an area with no family or friends, bellying up to the bar seemed like a logical place to meet people in a low risk environment. However, the negatives of this speak for themselves. Those large amounts spent on bars typically came from the same place, a bar that was within walking distance of my apartment. Not only is this a waste of time and money, it is obviously unhealthy, and leads to not only a lack of sleep, but deprivation of quality sleep. On top of this, I was still milking my relatively fast metabolism, that has since slowed. By monitoring my budget, as well as my waistline, I began to realize that bars and restaurants should be a treat, and not the norm.

Once you can get past these mistakes, there starts to feel like there is actually a goal in mind.

#change #anxiety