44 Ways to Ruin Your Financial Life By Age 30

It was not until I reached 30 that I started to turn my own financial life around. Unfortunately, by then, the damage was done. In retrospect, I often knew the decisions I was making were not-so-smart, but I did them anyway because I could always “pay it off later” or “just save more money when I’m older.” One of the cruel facts of life is that it gets harder when you get older.

Hopefully, by sharing a few of these bad money moves, it will prevent others from doing the same. And don’t worry, if you are over 30 and still doing these things, it is never too late to start living frugal.

Is Tuition Cheaper at the School of Hard Knocks?

William J. Samford Hall on Flickr by Robert S. Donovan

1. Take out three times as much in student loans as your first year’s salary. I’m all for following your passions, but if your passion only pays $35,000 a year, please reconsider borrowing $100k to get the required degree. Here’s more from a couple that owed more than $100,000 in student loans.

2. Trash your college enemies on Facebook and Twitter. Might be funny now, but your future boss probably won’t see the humor in it. Remember, the Web is an open book, and down the line things you say online can and will be used against you.

3. Trash yourself on Facebook and Twitter. The picture of you half-naked partying on the beach at Spring Break will probably get you a few more followers, but remember that future boss?

4. Go to school out of state because you like the football team. I included this one because I did it. Well, sort of. See, I thought I could walk-on for my favorite school’s football team, forgoing scholarship opportunities in-state. It was a dumb move, and one I paid for during the remainder of my 20s.

5. Just get a degree…in anything. Don’t “just get a degree” for the sake of getting a degree. Learn something, and prepare to apply it in the real world.

Work to Live, Don’t Live to Work

5D (#28134) on Flickr by mark sebastian

6. Accept a job you hate right out of school because it pays a lot. This ties in with student loans. Many graduates are so saddled with debt, they have little choice than to go after the biggest salary, even if it isn’t the best opportunity.

7. Form a partnership with three old fraternity brothers from college. It’s been said the only type of ship that won’t float is a partner-ship. Let the one with the most capital start the business and hire the other two. Much cleaner, and if the business fails, you can all walk away and still be friends.

8. Borrow thousands to start a new business. Entrepreneurship is the spirit that built this country, and I’m all for it. However, consider saving and starting up with cash.

9. Accept your first job offer without negotiating. A little wiggle room often exists in salary ranges, schedule flexibility, paid days off, etc, but you have to ask.

10. Spend $2,000 on your new corporate wardrobe before getting your first check. One of the classic mistakes by new earners. As with most things, it pays to pay with cash. Buy a couple nice outfits for interviews and your first day on the job, but beyond that, make do with what you’ve got until you get your first check or two. Then pay cash to add a new outfit to your wardrobe over time.

The Borrower is Slave to the Lender

Payday Loan Place Window Graphics on Flickr by taberandrew

11. Cosign a car loan for your best friend. I no longer borrow money to buy cars. And I especially wouldn’t borrow money to buy someone else a car, which is essentially what you do when cosigning a car loan. As a cosigner, you are on the hook if they default. And if they need a cosigner, there’s a good chance they will.

12. Give up credit virginity for a free t-shirt. When I was in college, I signed up for a Discover Card before a football game because they were giving away free t-shirts. Dumb. My running joke is that t-shirt probably cost me $500 in interest charges over the next few years.

13. Borrow money from your parents. What kid wants to borrow money from their parents? Not only does it change the relationship between parents and kids, it makes it tough to declare financial independence when we constantly have to turn to the First National Bank of Mom and Dad.

14. Pay off a credit card with a credit card, without closing one of them. Performing a balance transfer from a particularly high-rate to a low-interest rate credit card makes sense in the short run. That is, unless you fail to close the old credit card. If you leave both accounts open, chances are you’ll eventually wind up with double the debt.

Cars Don’t Make You Any Sexier

Nissan 370Z on Flickr by Team Dalog

15. Buy a car because you can “afford the payments.” Ever wonder why car dealers advertisers the cost of a car in monthly payments? It’s because writing $32,000 in window paint isn’t quite as catchy as $379 a month (for 60 months with a balloon payment at the end). See, it just doesn’t have the same ring to it, does it?

16. Drive like and idiot. Driving like an idiot can cost you big time. Makes it hard to save money on car insurance when you are collecting traffic tickets right and left. Not to mention the hit you’ll take on gas mileage.

17. Refuse to buy a used car because you don’t want someone else’s problem. This tired saying keeps coming up when a discussion on used cars takes place. A car transforms from new to used the second it leaves the car lot. A well-maintained, previously owned car, can save you thousands of dollars over a new model.

18. Buy a new car because it gets better gas mileage. Gasoline prices continue to climb, but it’s not an excuse to go and take out a loan on a new car with better gas mileage. In most cases, you’d have to drive thousands and thousands of miles to break even. Buy a car for better gas mileage if you already planned to buy another car, and you are concerned about the environment and your wallet.

19. Don’t shop for car insurance. No seriously; take the first offer you get. Don’t shop around for a better car insurance quote from places like esurance.com. Yeah, that will save you tons of money.

Insurance? That’s for Old People

20. Go without health insurance–even catastrophic insurance. When you are in your 20s, the last thing you are thinking about is getting sick. After all, you were just a teenager a few short years ago and the feeling of invincibility hasn’t quite worn off. Don’t take the risk. At a minimum, look into a health savings account or similar high-deductible plan that will cover you in the event of a major illness.

21. Turn down cheap life insurance because you don’t have dependents. If you die without dependents, someone may not be counting on your income, but it will still cost money to settle your final expenses. Don’t transfer that burden to your parents, or a close friend, because you were too cheap to pay a small premium for affordable life insurance.

22. Refuse to find disability insurance. After all, you are only 26, right? Who becomes disabled at 26? A lot of people. Illness, accidents and other bad things happen to young people, who are more likely to survive them disabled than die. Protect your new salary by finding disability insurance.

23. Don’t go to the doctor. Again, here’s that invincibility thing. At a minimum, follow your physician’s guidelines on annual or semiannual check ups. A little preventive medicine can go a long way towards extending your life and saving you money.

Going to the Chapel and I’m Going…to Need a Truck Load of Money

take me to the light on Flickr by sharaff

24. Marry the wrong person for the wrong reasons. Choice of spouse weighs heavily on future success or failure. They say opposites attract, but I’m not sure they stay together forever. Find someone who shares your dreams on subjects that matter most to you.

25. Spend six months of salary on an engagement ring. If you have to spend half a year’s salary on an engagement ring to impress someone you might want to think twice about your choice of partner. I’ve always thought one month’s salary was a good rule of thumb, and of course, pay cash. Further reading: Save Money on a Diamond Ring

26. Blow thousands you don’t have on a wedding. If you are debt free, and are marrying a partner who is debt free, stick to a reasonable wedding and avoid putting yourselves, or your parents, deep in debt.

27. Refuse to accept your partner’s debt. When you marry, you become one. So your spouse’s debts are now your debts. Remove “mine” and “yours” from your vocabulary when discussing debt and marriage.

Home, Bitter Sweet Home

Big House, Little House on Flickr by daryl mitchell

28. Buy a house without an emergency fund. Something interesting happens you buy your first home. Right away, your name is put on a list of those who should be tested, financially. I’m being a little sarcastic here, but it does seem like the minute you stretch to buy a home without proper savings, something will break causing you to immediately reach for the credit cards.

29. Share a mortgage with your boyfriend/girlfriend. I’m not being a prude here. Even if you decide to share living quarters with someone before marriage, please avoid sharing a mortgage (or lease) with them. If you split up, and chances are you probably will, the financial impact is a lot messier with joint ownership.

30. Sign a long-term lease based on the salary you think you will earn out of college. Wait until the ink has dried on that first job offer letter before signing a lease (or a mortgage) for your first place. Better yet, wait six months to make sure you really can afford the payment, else you risk being house-poor right out of the gate.

31. Don’t put any money down on that new mortgage. As many have discovered the hard way, homes can lose value. If you finance 100% of your new home, you have zero breathing room should your home lose value and you be forced to sell. Buying a new home is not cheap, but try to buy yourself a little breathing room by putting 10-20% down (close to 20% is best to avoid paying private mortgage insurance).

32. Stretch to get into a new home because it is a good investment. Repeat after me – my home is not an investment. We need to break this thinking that all young people should buy homes because they are a great investment. Yes, they can increase in value, but like all investments, they can lose value, too. The difference is, when your shares of Apple go down, you aren’t putting the roof over your head at risk.

Kids Are Expensive, and Worth Every Penny!

If We Hold On Together on Flickr by riza

33. Don’t get out of debt before having a baby. Any parent will tell you, things are difficult before kids are even more difficult after kids. Getting out of debt is no exception, so if possible, try to become debt free before having kids. Having said that, I believe children are a blessing, so don’t put off having kids just because you are in debt.

34. Offer to pay expenses for your grown children. This move alone will guarantee that they will never grow up.

35. Wait until kids are 16 to start saving for college. Who even thinks about saving for college until they are 16, right? Problem is, tuition increases and inflation become factors from the moment your kids are born. You have to save diligently to stay ahead of them both.

36. Give your six year-old a cell phone. My oldest is almost 11 years-old. After four years of begging, I’m starting to come around on the idea of her having a cell phone to take to sleep overs, sporting events, etc. (situations where we may need to contact her or vice versa). Her phone will be a real boring one with the only features being strong parental controls.

Investing in Your Future

Wall Street subway mosaic on Flickr by epicharmus

37. Open an online brokerage account to trade single stocks before funding a 401 because you want to get rich quick. This point really doesn’t need further explanation. In my own experience, I remember opening an online brokerage account to trade single stocks in the late 90s because even people my age were making thousands in their sleep. Problem was, I got in at the top, was poorly diversified, and worst yet, I wasn’t contributing to my retirement account at the time. Talk about needing to re-prioritize!

38. Pass on a Roth IRA. Opening a Roth IRA at an early age may just be the single best retirement strategy for young people. I know you can’t get the earnings until your 59 1/2, but when you do, they are tax free! And don’t forget, in the even of a real crisis, you can withdraw Roth IRA contributions at any time, tax and penalty free.

39. Dump all extra savings into company stock. One of my first jobs was for Lowe’s (the home improvement store). I worked with a guy in his fifties who dumped 100% of his earnings into company stock (through the employee stock purchase plan and an outside brokerage account). He obsessed over the stock price because mild swings cost him thousands of dollars from day to day. I just couldn’t live like that.

40. Get your investing advice from late-night infomercials. Who hasn’t been tempted to flip houses, sell MonaVie, or stuff envelopes for hundreds of dollars a month? The problem is, for every legitimate opportunity, there are 1,000 scams.

Shopping, Food and Rock and Roll

Century 21 on Flickr by chor Ip

41. Shop for clothes with labels that impress your “friends.” It’s time to be a grown up. Impressing your friends with clothes is something we did in high school.

42. Eat out every single meal. Eating out has its benefits. No preparation, no clean up, more social interaction, etc. However, it will clean out your wallet a lot faster than cooking at home. If you are a horrible cook, spend the difference on a few cooking classes.

43. Buy a television that consumes 80% of the square footage of your apartment’s living room. Some plasma televisions cost more than the car I currently drive. Unless you sit 30 feet from your television in a giant living room in a McMansion, it’s hard to justify a television worth more than your vehicle. If you are in the marketing for a television, it’s worth checking Amazon for a coupon code before doing so.

44. Don’t set up a monthly budget. One of my high school teachers had a sign hanging in her room that read, “If you fail to plan, you plan to fail.” Nothing could be truer when it comes to managing your money. Get over your fear of creating a personal budget and spend a little time telling your money where to go.

So there you have it; 44 ways to ruin your financial future. Hopefully, you’ll avoid most of these along the way, but even if you don’t, winning with money over the long term is about finding discipline and financial maturity. And that maturity can come at any age – 22 or 42. The advantage of finding that maturity at 22 is that by 42 you could easily reach financial independence, and have limitless opportunities ahead of you.

*This post was featured in the Carnival of Personal Finance #256: Market Crash Edition

Comments

  1. Overall, I think this is a good list of what not to do.

    But I think this is bad advice: 14. Pay off a credit card with a credit card, without closing one of them.

    Closing one card immediately lowers your debt to credit ratio, which will hurt your credit score.

    • @Dee: While it is true that closing a credit card can have a negative effect on your credit card, I’m more concerned with those that transfer a balance, leave both accounts open and run up charges on the old card. This effectively doubles their amount of debt.

    • Dee, when I’m paying off one credit card with another, I have bigger problems than my debt-to-credit ratio.

    • The caution that closing a credit card account causes your credit rating to drop, is way out of perspective with the facts and benefits of doing so and misleading. It is like saying, “I won’t buy a used car because I don’t want to take on other people’s problems. The truth is, it only lowers your credit rating a little bit, not more than 30 points, and this only lasts for 90 days. A person who is THIS concerned about micromanaging their credit score, should not be this dependent upon using their credit in the first place. The exception is if they are right above 700 points and they are just about to apply for a mortgage. Last month my wife accidental overlooked the Amazon account payment ( the automatic payment send order had expired) and, after a couple of years of paying down the balance well more than the minimum payment, we received an email notification that the payment was late. We paid immediately. Chase immediately raised our interest rate to over 22%, lowered our credit limit from three times what we owed to just over what we owed and charged us a $40 fee. I intermediately paid them off in full and cancelled the card three days later (after collecting my “rewards” check of over $50.00). Thankfully, I had the cash to do it. At this point Chase could offer to give me a $1,000 credit and pay ME interest every time I borrowed and I will never do business with them. Clearly, if they can make such unethically exploitative decisions to take advantage of their CUSTOMERS, their clients are always at risk of being thus manipulated in the future, even if they offer to “Change their policy” or if they credit your account because you ask for a favor from customer service. Obviously they count on screwing people who are not in a position to pay them off in cash or who quiver in unfounded fear of paying off their balance because they are scared of their credit dropping. It is a good bet on their part that we are all suckers and dependent peons. I hope that all readers who see this avoid any opportunity to get a credit card through Chase, including Amazon credit cards, regardless of how favorable the rate offered is. If you have an account with Chase, I urge you to pay it off and cancel it ASAP. Show the ca hones to absorb a temporary small dip in your credit rating. It is time that consumers take control over these exploitive financial predators who cynically know they can keep most all American shackled our own compliant naiveté while they rake it all in forever. Cancel your cards, but for one or two that may now be necessary to function and for an EMERGENCY. “OhmyGod! those Prada shoes are half price!”, is not an emergency. “OhmyGOD! My daughter is on life support in a hospital in another state after being a victim of a drunk driver and I have to get a plane ticket to be at her side to get her through. So cancel your Chase Amazon card too!

  2. What a great post. I was going to add ‘don’t get into debt for a wedding’, but then I saw it on the list. I also agree that it is good to chop up a credit card when transferring a balance. Along those same lines, I know several people that took off a home-equity loan to pay off credit cards, and then jacked them right back up again.

  3. Overall, good advice.

    “Even if you decide to share living quarters with someone before marriage, please avoid sharing a mortgage (or lease) with them.”

    A mortgage I get, but a lease I don’t. I’ve split leases several times with both roommates and boyfriends. The only penalty I’ve ever seen for a split lease where one party leaves is that the other party has to pay the lease in full until the end of the lease or until he/she gets a new roommate. There’s no difference in this situation from having a deadbeat roommate.

    Is there some other reason you added that in?

    -Erica

    • Yeah,

      My mom shared one with her ex-husband. It was all transferred to him when they divorced. 19 1/2 years later, collections came after HER because he had not paid it… and that included the ~20 yrs of interest! Apparently they can legally do that.

      • Though this probably happened a while ago, your mom should look at the statute of limitations, there’s a fair chance this debt has aged and they can’t come after her, but this differs per case and per state. Also, I am an european with no idea whatsoever about american law ;)

  4. Doh…comments don’t allow me to edit :) Most landlords also require that you put all parties who are going to be living in the home on the lease. So, if you’re living together and the other party isn’t on the lease, you could actually be in more trouble.

    -Erica

    • That’s a good point – I didn’t think of the requirement to list everyone living in the home. In general, I would recommend avoiding the co-mingling of finances/contracts with people before tying the knot. That’s where I was headed, but you’re correct – leases aren’t as much of a headache to “undo” as mortgages.

  5. Great list! My husband and I are 26 and 27 respectively…our biggest money mistake was giving $15,000 to a friend’s business because we felt bad for the business and had dreams of eventually making a huge profit (which is just silly when it comes to game stores). I saw “partnerships” on the list and that’s what I thought of…

    Thanks for mentioned wedding debt too…out of the three couples we knew getting married when we did, we were the only ones that kept expenses low and avoided debt (total cost was about $3000 and split between both sets of parents and ourselves).

  6. I disagree with a few of your comments, for example # 29 I am 25 and my fiance is 28, we were planning on waiting to buy a house till we got married, however the tax credit won us over. However, we have legal documents in place and will be married in a year.
    I also disagree with # 20, because if you are saving 10% or more of your salary, like you should be, you can get cremated and not be a burden.
    And #33 I am not sure about, if you are counting just credit cards sure, but if you are counting student loans or mortgage, I disagree with you. I am paying the same for my mortgage as I was for rent (less with a roommate) plus we have renters on the other half of the duplex and my student loans are about 6%, which is normal interest rate for mortgage anyway.

  7. Thanks for these Frugal Dad. I’m graduating college and getting married in the next month. Obviously a timely list for me!

  8. Question for FD about #27:

    Would you consider it inappropriate to delay marriage until a partner gets a better handle on his/her debt on their own?

    • @Dee: That’s a tough question. I try to think of it this way – if your future partner has old debts they accumulated in the “young and dumb” phase (which is what happened to me), but has since matured and is actively working to pay them off, that’s one thing.

      However, if they continue to live a spendthrift lifestyle that doesn’t line up with your goals, you are likely to have long-term issues as couple. In the latter scenario, I’d like to see couples work through their money differences before getting married, as money troubles continues to be one of the leading causes of divorce.

  9. #45 don’t put both spouses on a house or anything unless you are in a joint property state. About 6 or 7. Protected us after my business failed. If it was bought after the marriage its a property in a divorce settlement and if one dies 100% asset transfer to the remaining spouse.

  10. Thanks for such a comprehensive post (almost like FOUR posts worth of insight!). Count me in as someone who’s turned down life insurance because I have no dependents. Thanks for cluing me in–I’ll definitely rethink that one!

  11. love the list, and for the most part i agree with all of them. I would put number 44 though at number 1, as i do think everything starts with a budget, no matter how much you make or how old you are. If you dont know how much you are spending and making, how can change anything to improve your future financial situation.

  12. Two others:

    Go to graduate school for something that you will never do. Nothing says economic sidelining like seven+ doctoral work in a glutted field with no non-academic prospects.

    Work chump jobs well into your mid 20s.

    • I think the myth of graduate school as a terrible investment should be laid to rest. While it’s true that many people will be forced to take out further loans to fund a PhD, many won’t. In fact, top graduate programs will often financially support you to a level where you can comfortably begin saving money (and give you health insurance, etc.)…if you’re willing to live a frugal lifestyle, that is. But I agree with the deeper point: if you’re only graduate school options have terrible employment prospects upon graduation and don’t allow you any financial breathing room while in the program, don’t go.

  13. I’ll take cm’s comment a step further: don’t take out college debt to major in something that has a terrible payback ratio. Too many rack up $30 – $40K in debt for an undergrad degree in philosophy or psychology, which have no future unless you continue on to a higher degree (and higher levels of debt). Make your money first…THEN go follow your heart’s desire. Other things that fall under that mode would also be marriage, children, and starting a business. No reason to plan taking on debt for any of those events. Sure life happens, but it seems to happen worse to people who borrow for everything.

    • I think this is somewhat misinformed. I know a great number of people who have graduated with degrees in the humanities, or highly theoretical sciences, and gone on to great jobs. If you go to a *good* school and do very well, you will be employable, though not necessarily in a line of work that directly relates to your prior studies. For that, you’re righ that grad school will often be the only option (but see my comment on the above post).

      Solid performance in any demanding field of study from a reputable school will open doors to you. If you do go to college, my suggestion is to study what you’re passionate about and do well, instead of confining yourself to the most straightforwardly lucrative options.

  14. I love your 2nd paragraph: Hopefully, by sharing a few of these bad money moves, it will prevent others from doing the same. And don’t worry, if you are over 30 and still doing these things, it is never too late to start living frugal.

    –Not consistently investing in Mutual Funds (over the last 30 years)
    –Leasing a car (9 years ago)
    –Getting divorced without hiring a lawyer (10 years ago)

    One thing I’ve done right in the last three years is set-up savings accounts for our kids and showing them the resulting charts if the amount is consistently invested until they are 40.

  15. I feel like the new credit card rules make #12 less likely to happen, now.

    Which is a god thing. I had a whole deck of credit cards due to “free” offers.

    Aaron

  16. Re: #36
    Is your eleven-year-old going to a lot of sleepovers and sporting events without an adult chaperone? If not, s/he should be able to borrow a phone in case of emergencies.

    • @prufock: No way! But we’ve found over the years that sometimes parents are reluctant to let kids call home for some reason. I’d rather her have her own phone to call if she needs us. We’re still a year or so from making the decision, but we’re starting to explore options. Looks like the add-a-line feature with our current cell phone company is probably our best bet.

  17. I’d just like to point out that almost anywhere in the world other than the US points 1, 4, 6, 20, 22, 23, 35, don’t apply.

  18. Hi, I think you did a pretty good job with this.
    About a Uni Degree…
    Some study and pass courses that don’t have big job prospects,
    So if you are going to spend 4 years on something, make it a good choice with plenty of employment opportunities.
    Marriage: There are 4 compatabilities with the LOVE.
    1. Same Humour
    2. Same Faith
    3. Same Interlect level
    4. Good chemistry

  19. Ya, I’ve done a bang up job with my credit being an entrepreneur, from starting new businesses to making risky stock investments. However, the one thing I can feel great about is that I’ve obtained more knowledge of investing then most people ever do, ie, talking to my Masters in business sister or my father. Neither of them take risks, hence they will most likely never get a reward. I am optimistic that my past experiences, good and bad, will ultimately lead me to greater financial success, even if in the short term there have been painful lessons. Great article though! Thank you

    • Absolutely, Michael! Experience really is life’s best teacher. And if you’ve never failed at something, you’ve probably never tried anything. Kudos to you for furthering the entrepreneurial spirit. Over time, your negative experiences will no doubt lead to greater successes.

  20. This is a great list Frugal Dad. Most things I didn’t do before 30 or even after (thankfully) but I know some people even over 30 still making these big mistakes. Everyone can benefit from this list. :)

    We did however, purchase a home that was larger and more expensive than what we wanted or needed. This wasn’t intentional but after looking at the market, the price we paid for it (owners were already out, it was the middle of winter and they wanted to get rid of it), and the location, we knew it was the right thing to do. Sure, we had to rework our finances and be a lot more frugal but it has paid off. Our house has doubled its value in 5 years. We live in a small city (on the ocean) that is growing very fast, houses in the city are now impossible to get (in the area where we live anyways) so in our case, this was a good investment. Our house is our nest egg. Generally though,I think you are right about not buying as an investment but in this case, it worked for us.

  21. I really like this list. I don’t fully agree with the one about life insurance, though. Hopefully you are saving up for retirement. So if you die with no dependents, your retirement savings can be used to pay for your funeral. I guess if you’re in debt then it makes sense. Otherwise, I wouldn’t.

    • @Sue: True, but often times when you’re young you are in debt, or at least have little in the way of serious savings. Term life insurance for healthy people in their 20s is so cheap, you can easily purchase enough to cover your final expenses, and maybe leave a little to charity or extended family, for next to nothing.

  22. I’m sorry, but I don’t agree with number 29. Not everybody will get married, even if they have a family, for various reasons. Not everybody *can* get married – are you suggesting gay couples rent for the rest of their lives?

    • @Gillian: Certainly not. If someone is in a relationship with a committed life partner, regardless of marital status, that’s one thing. What I was cautioning against was entering into such financial engagements with casual boyfriends/girlfriends without consideration to the likelihood you’ll be together long-term.

      Thanks for bringing up this point, because it needed clarification.

  23. These are all great rules to live by, but to me, #32 is gold; if it had been followed more closely over the past 10 – 15, our economic climate would be much different. You only invest what you can afford to lose; most of us have one house and we can’t afford to lose it.

    Thanks

  24. If you and a responsible spouse both make over 30k a year you can do whatever you want. Unless you’re retarded. Buying a house and car are scams in this country. Same thing with ridiculous bail-out-banks and all that uselessness.

  25. I’m living testimony of no. 28. Within one week of buying my house my AC went out. Bye bye $2000.

  26. Great list.

    The one about owning a home with boy/girl friend is doable if the couple are planning to be together for a long time and have drafted up an agreement while love is still shiny.

    I have friends who have been cohabitating for 25 years and no intention of getting married. Everyone have their preferences.

    My painful mistake in college was to lend my car to a friend who totaled it. She wasn’t covered under the insurance that my parents had. Make sure that you cover the worst case scenarios when you lend things out to friends. That was an expensive lesson for my family and I still feel guilt over it.

    The other thing that everyone needs to be aware of is how much they are sharing in personal information over social networking site. This is incredibly invasive and most people don’t realize the financial damages. The consequences will stretch over decades. There are multiple articles out there including one on my site.

  27. I’m currently 23 and it’s good to see this list. I made a choice to go to private university out-of-state so I can gain worldly experience living in Boston. That choice wasn’t bad considering that I had $29k in student loans to pay for the 5 years of tuition after the financial aid package. The bad part was not finding cheaper housing after my freshman year. That part hurts ($41k in student loans just for living on-campus during most of those 5 years – two summers included).

    Wish I could see into the future and made better choices back then. I would have 1) lived at home and went to Stonybrook University for the same major for $2k/year or 2) moved off-campus and save myself $500/month on rent. I’ll keep your list in mind. I might just print it out and post it on my wall. Thanks for sharing!

  28. I’m really not sold on #21.

    The whole point of life insurance is to protect people from a loss of income that would occur when someone dies. If you’re young and unattached, there’s really no point in buying life insurance, unless you get it automatically through your work or something. Funerals are as expensive as you make them, and if you get cremated (as others pointed out), then you don’t have to buy an expensive casket.

  29. I love your first picture! WAR EAGLE!!!

    Great post! Any and all of these things can lead to financial ruin. Avoid them and you’ll be set (or close to it)!

  30. I would add: #45 Don’t worry about your kids grades until they’re in high school.

    Part of the reason our family is debt free today is because I was able to go to college on grants and scholarships w/o ever having to take out a loan. Why? Because of a high GPA and ACT score…and keeping that GPA up during college. (Maybe that could be #46: GPAs don’t accurately judge intelligence so they don’t really matter.) But that GPA didn’t really start my freshman year in high school. I can remember my parents helping me along the way in elementary…doing spelling drills, checking my math homework, helping me study for history exams. (Many people already have school aged children when they are in their 20′s) I’m not saying put unnecessary pressure on your kids, especially if they aren’t at the top of the class in 6th grade. But it’s more likely that they will go to college on an academic scholarship than a sports/music one. So pour into them at an early age and possibly forgo taking out loans for your children when they head to the Ivy League a decade later. :)

  31. I hate being in debt. I have a student loan but I have more money than I owe in the bank and I’m earning more interest on my money (rate wise, not total) than I owe. I see all my friends buying cars and houses and getting into debt and it worries me. there’s nothing wrong with being stingy; there’s also nothing wrong with splashing your cash around if you know what you’re spending and how it fits within your plans.

  32. I would like to give this to the graduating students I know so how do I go about that. Can I just print it or is there some place I can buy it.

    • @Helena: You can simply send them the URL via email, or copy and paste the article text into an editor such as Microsoft Word and print from there. Feel free to pass it along.

      Your question does have me considering creating a small ebook with these tips designed in a neat package for purchase/download.

  33. Awesome list. I’m happy to say I only have done maybe half a dozen of these :) and have since fixed almost all of them.

    The real point is, think ahead so you don’t have regrets.

  34. Why would anyone need (or any parent want to give a child) a cell phone before, oh, at least high school age? For what purpose?

    I didn’t have a cell phone until after college. Then again, the only cell phones were those monstrous wired car phones.

  35. A word on business formation also: I would avoid operating as a sole proprietor, if you can possibly avoid it. The tax laws are advantageous to those operating with some kind of corporate structure, plus you can avoid losing your personal assets should you get sued.

    I operated my first business as a sole prop. generating very high amounts of advertising revenue, and then the bottom half of the year, much of that revenue fell out from under me; yet I was still stuck with the tax bill in the end.

    Just bite the bullet and pay an attorney to incorporate your business properly. You’ll be glad you did.

    -B

  36. Very Nice List! Most of my friends have fallen victim to buying a new car (several BMW’s in the group) and eating out a ton. Reading this list reminded me of a lot of things my friends are doing wrong right now.

  37. Ok, here’s the one huge lifestyle mistake I never see mentioned in financial columns or on blogs. Why is it that no one ever mentions what a horrible idea it is to have kids out of wedlock????? Do bloggers assume that people already know this? Obviously, a lot of people don’t since more than 1/3 of kids today are born to unmarried parents. Or are we all so PC nowadays we dare not state the obvious for fear of being labeled radical, right wing, mean-spirited conservatives????

    • There are a lot of reasons why people have kids ‘out of wedlock’. Some people don’t believe in marriage as an institution, or are not religious so see no compulsion to do it. Some people choose to be single parents. Some people get pregnant by accident (yes, it does happen, even with the best precautions in the world) and their partner does not choose to stay with them. Some people cannot marry because they are gay or lesbian yet still want to bring children into the world. It’s no more a ‘lifestyle mistake’ than choosing to end an unhappy marriage with a divorce (which can, of course, be very expensive). It’s no more ‘obvious’ than any other subjective advice.

      I don’;t think there’s anything ‘PC’ about accepting that some people choose different ways of living and creating families than others.

    • I will agree with Gillian.

      More to the point though, is there any FINANCIAL difference for having kids out of wedlock? In the best case, two people have a kid but never want to marry. The child has two loving parents, and the parents bring in two incomes. (Again, this is the best case.) There doesn’t appear to be any FINANCIAL difference between this scenario and one with married parents.

      There are numerous other possibilities, where kids are born out of wedlock, for good, bad, or accidental reasons, and are no worse (or better) than kids born to married parents…

      Some PF bloggers are “radical, right wing, or mean-spirited conseratives” (your own words), but none of them discuss “kids out of wedlock” because it make no lick of FINANCIAL difference, thus no reason to discuss it in the first place!

      • I volunteer in a food pantry. My experience there tells me nothing will put a woman in poverty faster than having children out of wedlock or divorce. I see it time and time again. Anecdotal evidence, I know.

  38. #17 is not always true and creates some risks. I don’t think this can be a clear cut rule. You have to do the math. Buying an 8 year old car for $7,000 will probably only last you 2-4 years until things start breaking on it, depending on the mileage. You also really have no way of telling whether the previous owner took good care of it or not. Let’s say you luck out and it does last you 4 more years without any major problems. That makes the price $1,750 per year. Where if you bought that same car brand new for $20,000 and it last 12 years without any major problems, then the price of the car is $1,666 per year. This example is a rough estimate for a Honda Civic without all the bells and whistles, with help from Kelly Blue Book. The price of the new Corollas might even save you more money than the Civic. Also, you have to factor in how soon that 8 year old car will need new tires and other minor fixes. Where, a new car for example, doesn’t need any new tires or maintenance for about 60,000 miles. Therefore, a new car CAN even be cheaper, while being less of a headache with repares. New cars will also be under warranty for you for a longer period of time.

  39. Amen. I am 21 years old at time of posting this, and I’ve seen the same thing happen, to my brother. He doesn’t have a degree, but over $40k in student loans, next to who-knows how many other debts. Also he’s not going to school anymore and feel like life hates him cause he has so much debt. I wish i could help him but then again I don’t think I can. I was at a friend of my girlfriend’s a few days ago (shes 18), and my girlfriend was saying how she was going to work fulltime till the summer’s vacation (picked the wrong study, starting over again). I’ve been pushing her to work, as it’ll give her a care-free vacation and some spending money when she starts her new year. Her friend’s reaction was “What? Why do you want to work? You’re young, now is the time to chill and relax, you can always loan money, come on” My god I was angry. Angry and baffled at how someone can think like that.

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