What I Wish I Had Known About Money When I Was 18

Want to know what isn’t fun? Trying to pay off debt and cleaning up lots of big financial mistakes. With large interest payments it can be so hard to get back out of debt. It’s much easier to make good decisions from the start. This post is for anyone who is just starting out or who is ready to start over.

This is a list of financial advice that Southern Savers readers wish they had known when they were 18. I hope you’ll share it with any teenagers and young adults you know! It just may help shape their financial future for the better.

Also, it’s never too late to change your ways. If you’re in debt and ready to get out of it, hopefully some of this advice will help you! I also have great tips on budgeting.

What I Wish I Had Known About Money When I Was 18

Budget

1. Write everything down. Keep track of what you spend and put every transaction in its proper category. That way you can easily see where all the money is going and if you are over-spending in a certain area. It is also easier to find money to help save for bigger expenses.
2. Stop being sold stuff. Stop buying. If I had all the money I spent on things I didn’t need…
3. Never ever buy a brand-new car. Buy one with low mileage so that someone else has already taken the hit on its value depreciation.

4. You don’t need to buy that. Stop buying useless things.
5. Always keeps small amount of cash with you, (in your car, purse, wallet).
6. Live like you are still a poor college student.
7. Eat and cook at home.Fast food and take-out is expensive.
8. Have a budget and stick to it! You don’t know how much money you blow with random small amounts.
9. If you always spend less then what you make, you will never owe anyone money.
10. Take a financial peace class with Dave Ramsey! He teaches so much you don’t learn in school.
11. Learn to budget for real life expenses before you take them on.

Avoid Debt

1. If you can’t pay cash, you can’t afford it.
2. Credit Cards are NOT free money.
3. Debt is basically stealing tomorrow’s money to pay for today – this is what I tell my own 18 year old almost every day!
4. Spend less than you make. Don’t borrow. Don’t try to be like your peers or listen to those who are broke. Save big and invest early. You will find a way to not borrow.
5. Don’t go into debt over weddings or funerals. Have a small wedding for cheap, then use the money you save for down-payment on a house.
6. Never lease a car. Buy used instead.
7. Debt sucks. Do everything you can’t to avoid it – even if it means delaying college. Being debt-free will affect your life more than a college degree will.

Save

1. Save. Save. Save. Here are some practical tips for saving.
   
2. Top 10: 1. Save 2. Save 3. Save 4. Save 5. Save 6. Save 7. Save 8. Save 9. Save 10. Don’t spend money Also, when you get married, live on one income and save the other.
3. There will ALWAYS be a rainy day just around the corner, no matter how bright things are in that moment.
4. “The 1010 rule” was in our home. 10 percent for the Lord and 10 Percent in savings.
5. Opt in for retirement fund and meet the matching requirements.
6. No matter how much or how little you earn, pay yourself 10% first. This will be your emergency money and you will lower your risk of not being able to pay for emergency expenses. Just make sure you do not spend it except for an emergency.
7. Once you get married, live off of one income if you can. Save the rest or pay off any debt. You’ll be so glad you did when children come along.
8. Make a budget and stick to it. If you have extra left over, it goes into savings.
   
9. Tithe, save all you can.
10. Have money automatically drafted from your checking account to your savings account. If you think you will remember or will be motivated to do it, you are probably wrong.
11. Save as much money as you can before having kids. You might think you’ll go back to work full time, but you don’t know how you’ll really feel until you have a baby.

Invest

1. Start a Roth Ira, compounding interest is your friend!
2. Start a 401k as soon as possible and DO NOT I repeat DO NOT borrow against it or close it out in order to get all the money out.
3. Go to a financial advisor set up investment accounts and contribute to them every paycheck.
   
4. Put back at least $20 a week in savings or a high interest account. You don’t need a brand-new car, buy second hand clothing, live on your own or roommates before getting married.
5. Pay yourself first into an investment account, ALWAYS. Like your life depends on it, before anything else gets paid. CAN I GET AN AMEN?!
6. COMPOUND INTEREST is a wonderful thing – save when you can (have it taken directly out of your paycheck!) Every little bit now makes a HUGE difference later!
7. Here are more tips on investing.

Think Wisely About College

1. You don’t have to go straight to college from high school. You can take some time to hang out with friends and try some things, get to know yourself before you commit to a degree.
2. Student loans will make your immediate post-college life very difficult — especially when you get married and have kids quickly after college.
3. Student loans are not low interest. That’s what everyone told me in 2004 and the rates were 8%. My mortgage is only 3%.
4. Say no to student loans, technical college education is legit and makes much more economical sense.
5. Work hard in high school and apply for scholarships. They have scholarships for everything.
6. You can make more in the trades than in college.
7. If you know what you want to major in, spread out all your basics over your four years instead of cramming them all in first. You’ll have a more balanced schedule and a less stressful workload in your junior and senior years that way. My academic advisor gave me that advice, and it was one of the best pieces of advice I ever got.
8. Never use private student loans. The interest rates are astronomical.
9. See more tips for saving on college here.

Housing Tips

1. Determine the “real” amount of money you need to buy a house..including insurance, taxes, closing costs…I had no idea how a mortgage worked till I bought a house.
2. See tips for saving on housing here.
3. Better to put money towards a house instead of throwing it away on rent.
4. Do not buy a house until you can afford the maintenance.
5. Get renter’s insurance if you are renting. If the apartment complex/rental house burns down, they are not responsible for replacing your belongings. It’s usually cheap to add it onto your car insurance.
   
6. Live below your means. When you buy a house…don’t get a house for what you qualify for, get one below what you qualify for/can afford.
7. If you are a couple and buy a house, make sure you can make the mortgage payments based off of one income. You never know if one of you might lose a job or become unable to work. This way, you won’t lose your house.
8. Get a full home inspection before buying.

Building Credit

1. You want to build credit! Put your water, power, whatever you can in your name instead of your parent’s name.
2. All of this credit cards are bad isn’t true. You just have to have self control. I pay everything including most my bills through my credit card. I pay it off every month. It has built up my credit and gotten me a lot of rewards/money.
   
3. Pay all monthly expenses on a credit card but pay it in full so you aren’t paying interest. Get one with a good rebate program and make your monthly expenses work for you. Plus the added protection that if your info is stolen it is the credit cards money and not yours. Then take your rebate dollars and invest them!
4. See more tips on credit cards here.

Other Tips

1. Short term disability, never know the minute you will need it. It won’t give you much, but its money coming in while you can’t work and still have bills to pay!
2. Buy term life insurance. Not whole life insurance. Whole life insurance is a huge financial mistake.
3. Both husband and wife need to know where the money goes. Bills are real. And if you lose your partner, can be a disaster if you were not aware. Major purchases should be a shared thing. More tips on that here.
   
4. You’re not too good for coupons, bakery discount stores, and working for minimum wage if that’s all you can get and you need money. And you DON’T need the latest and best technology.
5. Stop blowing your money at bars. Literally money down the drain.