7 Financial myths to ignore

7 Financial Myths To Ignore Before You Graduate

We get a lot of unsolicited advice growing up and following them blindly comes at a cost.

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I was trolling Facebook as usual while thinking up more useless way to procrastinate when I fell on a post saying your 25-30s is a time spent cleaning up the financial mess of your early 20s. That got me thinking of all the rampant unsolicited financial advice I got from people before going to college. And how in hindsight, none of that make sense. It's no wonder half of college graduates leave with massive debt and no clue on how to manage their finances. Here are seven financial myths that you should toss long before the grad cap.

CREDIT/DEBT IS BAD

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Hate to tell you this but, you probably got this advice from a person with a bad relationship with credit. Only bad debt is bad, but good debt is good, thanks for listening to my ted talk! But hear me out, by good debt I mean a credit card balance which is paid off every month or a car note on automatic payment, being paid on time every month. Starting to make sense? Building good credit history settling debts on time is a super unsexy yet easy path to riches.

CREDIT CARDS ARE FOR EMERGENCIES

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Absolutely not! That's what your emergency fund is for. That's how people develop a bad relationship with credit. It's not for when your car breaks down out of nowhere. It's for the Mondale stuff you regularly budget for. I'm talking gas, movies, and two for ones on taco Tuesdays or whatever. It's for the simple everyday purchases that will help you rack up points.

CASH IS KING

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Maybe back in the early 2000s but now buying online can be much more efficient then spending cash. Why? Because oftentimes before making a purchase you can compare price in different sites and look for discount codes before committing. Also there are a number of budgeting and money tracking apps to flag you down and add up those late night amazon session for you. More like Netflix and Buy Now, I see you.

EXTENDED WARRANTIES ARE WASTEFUL

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Yeah sure, and that $500 Xbox is totally going to make it through those ABC Greek parties unscathed. Listen I worked for a major retailer and used to get those calls from dumbfounded customers who couldn't believe they were SOL when their brand new flat screen pooped out a week after taking it home. Also, those extended warranties usually take effect after the manufacturers' expires, so the total coverage can be upwards of 4 years. Image that $600 blender or yours dies three years into your smoothie relationship only to resurrected for free, or for a fraction of its price because you shelled out an extra 20 bucks at purchase.

SAVE NOW INVEST LATER

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Let's be honest, at 20 what are you really saving for? Probably not a house, maybe your wedding… cuz it's cuffing season? I'm definitely not knocking saving money, it's a good idea and worth it but now you're not really thinking about the big stuff that becomes relevant down the line. Although you're not in your cushy corporate job yet with the sweet 401K match. You'll still be better off starting a Roth IRA and stashing away what you can. Even if it's $20-$50 a month.

USE LOANS TO SUPPLEMENT FIN AID

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No, just no. Use loans as a last resort, there are other ways to pay for college. Get a summer job, look for grants, and scholarships. There are scholarships for every race, color and creed. There are scholarships for every major and there are scholarships for your random AF hobbies. They just don't come delivered in your inbox asking you to sign and collect the money in a few weeks time. You have to find them.

PAY OFF YOUR BILLS FIRST

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Here's the thing, skipping two car notes is the fastest way to get back on your feet. I'm not advocating anyone skip paying their bills for the sale of saving money or blowing it in an unnecessary want. However the reality is the older you get the more bills you accumulate. Get in the habit of paying yourself first. Pay yourself by regularly funding your saving/emergency fund. Pay yourself by investing in your mind and well-being. Invest in a guitar lesson, wellness retreat or counseling. Fund your IRA or other investment accounts. Don't let your paycheck exist just to pay your bills and make it through the month. It's your money and you worked hard for it. Now go buy that bag, no the one the clearance rack…

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There is a seemingly new trend of "If College Majors Were ___" circulating on Odyssey. I must admit, they're all pretty accurate and fun to read. So find your major on this list and share with your friends to let them know what flower you are based on your college major!


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Cover Image Credit: Wikimedia

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Crossroads

Trying to figure out what to do in life.

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I never saw the crossroad

Where I could cross n' roam

Under an arch or dome. [1]

I just kept on the road

That was laid out,

Told to hold out

Till it pays out. [2]

Now I think its too late

Been walking too long,

Classes are all wrong

But masses too strong. [3]

So I follow with my head down

And chest up, succeeding cause

I'm too scared to fuck it up. [4]

But I have a need to lead,

Top-down and gears up

Leaving nothing to the dust.

But if I drop out, I'm a fuck up. [5]

Is it better to live and rust

Or drive till it busts

With trust you can find the way? [6]


[1] - Play on roam/Rome. Starts the poem by expressing the feeling of being trapped in my path in life. I felt like I never got the chance to figure out what I wanted to do.

[2] - I think a lot of it was I was following what people told me I should be doing.

[3] - I have a feeling that it is too late to change my course of life. I'm in a college for business, taking classes about business, and everyone around me wants to do business.

[4] - This is saying that even though I am not passionate about what I am doing I am still trying to succeed only because I'm scared of failing or quitting.

[5] - I want to leave and lead myself, do something where I'm not following but I don't know how to do that. This part starts a car reference, idk I've been watching Formula 1 on Netflix and its dope.

[6] - This is the question I've been asking myself, wondering if I should continue on with my path or follow my passion.

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