8 Financial Fixes for the Lately Launched

Maybe you’re fresh out of college and starting a new job or you’ve been struggling since leaving college to land a job and finally, mercifully, you have landed one. Either way, you are embarking on your future, free as the wind and feeling like the world is your oyster.

Finally you will be earning your own way through life. The long drought is at an end and the sky is going rain money. It is an intoxicating feeling, this independence, this income stream, this financial freedom.

We all begin our working lives with this mindset. Our thoughts turn to new cars, fresh wardrobes and a lust for all that life and circumstances have denied us.

Warning: Intoxicants Impair Judgment!

Yes, I know—you are twenty-something and you feel that if you do fall, you’ll land in a pile of Christmas. Sadly, that’s just not true. Five or ten years from now, as you look in the rear view mirror, you will see I’m right. If you have an interest in avoiding some of these unpleasant reflections, read the following pearls of wisdom, hard won in a misspent youth.

  • Short of winning the lottery, there is no way to get rich quickly. We live in a capitalistic society. Everyone is trying to get into your pocket. Multi-level marketing schemes, stock swindles, pyramid scams and a host of other “opportunities” to make it rich quick will come your way. Always remember, there is no substitute for hard work, perseverance and patience.
  • Be mindful of your credit rating. Good credit is money in the bank. Treat your credit cards and other obligations as a sacred trust. Never forget this simple fact: 65% of your credit score is dependent on keeping your credit card balances at less than 30% of your credit limit and paying all your obligations on-time. Simple!
  • Track your spending. Money has a way of slipping through your fingers. Create a realistic budget and stick to it. The two most important things to do: 1) live below your means and 2) learn the difference between wants and needs.
  • Read the fine print. The devil, as always, is in the details and unfortunately these details are often obscured by line after line of fine print. Most of the fees you will encounter in your financial dealings are in the fine print—ATM fees, checking account fees, savings account maintenance fees, late charges, monthly or annual credit card membership fees —financial penalties of all stripes lurk here. Never sign anything you do not understand.
  • P.J. O’Rourke once quipped, “There are a number of mechanical devices which increase sexual arousal, particularly in women. Chief among these is the Mercedes-Benz 380SL convertible.” This may or may not be fact, but the purchase of a shiny, impressive new car is something you need to consider carefully. The excitement wears off long before the payments end.
  • Establish an emergency fund. We call it an emergency fund but, in truth, it is a “shit happens” fund. Building one will be possible if you practice living below your means. How large this fund should be is the subject of debate. Let’s just say, the bigger the better.
  • Set goals. We can fumble our way into the future or plan for it. This is a choice between living your life like a Sunday afternoon drive or a well-planned vacation. Generally speaking, the vacation is the more pleasurable experience. I’m not proposing a detailed road map, but rather a general idea of where you are going and what you want to accomplish when you get there. Goals give your life purpose.
  • At this point in your life, you are feeling invulnerable and invincible. Time will rob you of this mindset. One of the most important things you can do for your future peace of mind is to begin setting aside money for your retirement. Planning out an investment strategy to provide for your comfort in later years is important. You may not be able to wrap your head around that now. You just need to take my word for it.

I’ll climb down from my soapbox now. As you will learn, all too soon, the choices you make in life have consequences. Following the suggestions offered here does not guarantee a good outcome for you but, failing to heed this advice, almost certainly guarantees a bad one.

What About You?

I’m sure our readers can round out this list. Please share your thoughts for the benefit of our readers. Do you have any suggestions from your life experience that will help young people just starting their life journey?

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