This content is provided courtesy of USAA.
By Scott E. Halliwell
"Congratulations! Today is your day. You're off to Great Places! You're off and away!" So wrote the beloved author, Dr. Seuss, in the classic "Oh, the Places You'll Go!"
Find out what's happening in Fort Braggfor free with the latest updates from Patch.
This story was such a staple in the bedtime routines of my children that I can still quote from it all these years later. And while Dr. Seuss covered the life lessons of stepping out on your own, I'm focused on the financial lessons. So, whether you're graduating from high school or college, here are five money ideas to get your real-world journey off on the right foot.
-
Think before you spend (budget): This sounds pretty simple, but it's harder to pull off than you might think. Increase your odds of success by laying out how you plan to spend and save your money each month. If you're intentional about it and don't stray from your plan, you'll be better off than a lot of your peers. Granted, you might have to settle for a little less than you'd like, but this is about a little short-term pain for a lot of long-term gain.
Find out what's happening in Fort Braggfor free with the latest updates from Patch.
Expensive cars are for rich people: Way back when I graduated from college, my newly graduated co-workers and I got into an informal game of vehicular one-upmanship to see who could get the coolest car. Talk about dumb! Several of us buried ourselves in so much car debt that it took us until our 30s to unwind all the problems it caused. Don't do as we did. If you want to get started off on the right foot, your monthly car payment (assuming you have to borrow money to get some wheels) shouldn't be more than about 8-9% of your gross pay, in most cases. For someone making $30,000 per year, that's about $200-$225 per month.
A negative net worth can negatively affect your life: Net worth equals assets (what you own) minus liabilities (what you owe). The sooner you make this a positive equation in your life, the better off you'll be. I've met countless people over my career who are in their 40s and still haven't figured this out. The result? Stress. The crushing weight of debt or the lack of money in the bank has caused more people more problems than we'll probably ever be able to quantify. Do you know anyone who fits this description? If so, do yourself a favor and don't be like them. Instead, build up assets and minimize debts — be positive.
A big account beats a big-screen TV: Consumerism runs rampant in America. Everybody's got to have everything, and they've got to have it right now. The result? We're a nation buried in debt with many people having little to nothing saved for emergencies or for long-term goals like retirement. Do yourself a favor and buck the trend. Don't get sucked into the idea that your success is somehow tied to all the stuff you have — it isn't. Those who achieve real financial success understand that saving money needs to be higher on the priority list than spending it. Plus, once you've got a good foundation in place, you'll feel less stress about those things you do spend on.
Insurance is important: Bad things don't just happen to bad people, they happen to all people. And until you're financially secure enough to handle whatever comes your way, having insurance is a great way to protect your finances when the unexpected occurs. Just starting out, you may only need health, auto and renters insurance to protect your bank account, car and stuff. But as your life changes, so too will your need for insurance. Understand your risks and insure them appropriately.
Let's be real: Stepping out on your own financially can be an intimidating experience. Mess up early and you could be paying the price for a lifetime. Get it right, though, and the opposite is true. So, use these five ideas to help you get started (and don't be afraid to check out the wisdom of the good Dr. Seuss while you're at it).
Get more local news delivered straight to your inbox. Sign up for free Patch newsletters and alerts.