Eighteen is a unique time in your life. High school is most likely coming to a close and legally, there isn’t much you can’t do. But yet you’re probably still living with your parents and have to obey many of their “house rules”. Financially, you aren’t independent and must still depend on Mom and Dad for many of life’s necessities.
But don’t let the downsides depress you. This is a great time to figure out what exactly what you want out of life. Start thinking, seriously, about career options and what you want to accomplish with your time on Earth. Think about personal issues. Do you want to get married? Have kids? Stay a bachelor forever? Become a nun?
Think about things about you may want to buy…someday. A nice home? A sport scar? A medical degree? You don’t have to make any concrete decisions right now, but it’ll help tremendously if you have a certain “life plan” you can look at for direction.
Why is this important financially?
The world, as they say, revolves around money. Almost any decision you make will have a monetary consequence, good or bad. Try to figure out what things/people/experiences you enjoy spending money on. This is where your financial priorities lay.
For example, I’m most likely going to a cheaper university than I had originally planned because I’ve decided that I really want to travel during college and after. Instead of spending money at an expensive we-rape-you-because-you-are-out-of-state school, I’d prefer to spend it traveling the globe, or at least parts of it.
Travel is important to me, so I’m OK with not driving the nicest car possible or renting a luxurious apartment when I graduate.
What is important to you? What are you OK with?
Once you’ve figured this out…
Cut costs like it’s your job on things you don’t enjoy, but spend generously on the things you love. Don’t let other people tell you what is worthwhile. Assuming it won’t get you into debt or prevent you from achieving your saving/investing goals, go ahead and buy the Escalade. Go out and party. Hard. If that’s what you want, by all means, go for it. But just know that it’s what you really desire.
Keep in mind that debt is the enemy when trying to figure out what you want out of your life. Besides getting an education or buying a house, there aren’t many, if any, good reasons to go into debt. And even for education and housing, there’s a fine line between acceptable and ridiculous.
I know, this topic is intense. But just think how helpful it will be to think it all out. Just remember that nothing is 100 percent yet. You’re just trying to imagine what want out of life.
Eighteen is a wonder opportunity to “start” the game of life. Don’t waste it away!
If you’d like, you can jump back to the previous post in this series: Saving for Retirement.
