Archive for the ‘Being An Adult’ Category:
Forget the College Experience, I’m Mooching
Just a few weeks ago, I wrote that community colleges aren’t always a good choice even if they save money. I went on and on about how I wanted the “college lifestyle” and “iindependence”. As of today however, I’m a hypocrite. Sort of.
I requested to be released from my housing contract. The university approved it.
In that post, I mentioned that it was going to cost me around 8 grand to stay in the dorm. When I signed housing papers three months ago, it was easy to act like this was no big expense. As the start of school got nearer though, I realized that 8 grand is a big commitment. Not even counting interest. I just wasn’t comfortable with paying that much money to live in a cramped room 35 minutes from my house.
I have other goals that would be negatively impacted by living on campus. I want to study abroad. ASAP. If there’s a program that works for me starting sophomore year, I’m probably going to take it. Study abroad isn’t exactly cheap so there’s no sense in adding more student loan debt to my plate with on campus housing. Besides study abroad, I just want to travel for the fun of it. The less debt I have, the more cash I’ll keep to pay for it.
Personal reasons also played a part in this decision. I was never exactly thrilled with the idea of living in a dorm, but I went along with the typical graduate-high-school-and-live-on-campus process. This is the template lifestyle that a lot of people are talking about these day and it wasn’t really what I wanted.
Unlike a lot of recent high school graduates, I’m not dying to get out of the house. I have healthy relationships with my parents and sibling. My parents aren’t strict – I literally do just about anything I want to do. I just try not to be an ass about it, i.e. No slamming doors at at 2 a.m. Of course, there are other benefits too. I don’t have to do laundry or dishes. I do plan to help out more, honest! Regardless, I have a good thing going here. I’m not ready to change it. (This is the part where the Internet can call me spoiled and selfish!)
Just as our finances change over time, so do our goals and instincts. What we thought was a good decision a few weeks, months, or years ago might not be so smart today.
Plans for My First Credit Card
My Discover Student credit card came in the mail last Thursday.
I know anyone who’s had to deal with credit card debt, and Dave Ramsey of course probably has a few issues with that sentence. But don’t worry. I have no plans to rack up any kind of balance that I can’t pay off at the end of the month. I’ll even shred it if I find myself spending more than I can afford.
For now, I’m only using the card for things I was planning to buy anyway: Cedar Point tickets, gas, normal eating out, and some stuff for college. The best part, besides being able to hang onto my money for an extra 30 days, is that I’ll be earning 5% cashback. Not a fortune, but who would turn down free money? I also have no interest on all purchases for 6 months, but I don’t plan on taking advantage of that benefit. I don’t want to fall into the “Oh, I don’t have to pay for this for 6 months!” trap.
Once I get used to making a lump-sum payment every month, I’ll consider adding more impulse type purchases to my credit card. For now though, I’ll keep using cash or my debit card.
What was your first credit card? Did you use it responsibly or did you get into trouble?
Now I’m Good Enough For You, Discover Card?
I mentioned a few months back, when I turned 18, that no bank would approve me a credit card. I applied first for a Visa card from CitiBank, then a Speed Way card from Chase, and finally I attempted to obtain credit from Discover Card. All of them rejected me for similar reasons: low income, no credit report, and really low income.
Imagine my surprise on Wednesday when I received a credit card application from Discover in the mail. They were actually soliciting me this time. So I went online and applied (again) using my “special” “invitation code”. I click submit and expect to read a message saying “Sorry, you’re not credit worthy.” Blah blah blah.
Instead, they tell me that I need to call to confirm some information. I call, but I don’t think it’s going to result in anything.
Me: Yeah, I applied for a student card that you mailed me and the computer said I needed to call or something?
Discover Card Lady: Oh no problem. Let me just look up your information. May I have your name and social security number?
Me: No problem. *Gives them to her.* (You didn’t think I was going to put this in the post did you?)
Discover Card Lady: OK, I’ve pulled up your application. We just need you to fax us something like a utility bill or bank statement to verify your address. Also, a class schedule from your college to verify that you’re a student.
Me: So…am I already approved and you just need this to complete the process? Or… (and where will I find a fax machine?)
Discover Card Lady: Yes, as soon as we get those documents, you’ll receive your card in 7-10 business days.
Me: Awesome. Thanks!
I thought Discover was just tempting me. Showing off cool card designs and attractive cash back rewards. Oh and no payments on new purchases for 6 months. Just like any ol’ tease would do. But nope, it seems like she actually wants to seal the deal with me. OK, I think I’ve taken that metaphor as far as it can go.
Now that some corporation has decided I’m credit worthy, I’m going to buy so much stuff and only make the minimum payments for as long as possible.
Just kidding.
But seriously, where can I find a fax machine? It’s 2010. Does a dial tone even exist anymore?
Thanks Technology: You Let Me Mange My Money Even Though I’m Only 12
what sharks? by oskay on Flickr!
But it’d be an even bigger hassle without technology. Here are some ways it helps:
Online banking lets me see all my transactions almost as soon as they occur. No need to drive to the bank – and that’s important when you’re 15 and don’t live in a city.
Similarly, I never would have known how to open a Roth IRA without the Internet. My parents invest for retirement through their workplaces. They probably wouldn’t know where a teenager could invest either.
Taxes. When you’re 16 working a summer job, you don’t need a Certified Public Accountant (CPA) to handle your taxes. I can do my own with TurboTax or Taxact.com for free with no complicated Internal Revenue Service (IRS) documents to fill out.
The biggest benefit to technology is the anonymity. No computer ever asks “Are you sure you’re old enough to be doing this?” But even 18 year olds can face condescending attitudes from bankers. Walk into a bank and try to get a small business loan at 18 and I’m sure they won’t make the process easy for you.
Of course, technology hasn’t made personal finance entirely without its problems. ING Direct will let a minor log in to view account balances, but they won’t let them transfer money. To do that, I had to log in as my dad. Not a big deal since he doesn’t bank with ING – I simply used “his” log in as “mine”. Still, it was an extra step.
How does technology help you manage your money, even if you’re old…er than me?
*I’m actually 18.
Is Community College Really a Good Idea?
This post might ruffle some feathers…so don’t say I didn’t warn you!
If you’ve ever been to a personal finance blog and read about ways to reduce the cost of college, one of the usual tips is to go to a community college for a year or two and then transfer to a 4 year university to finish the degree. I’m pretty sure I even recommended it in a post from a few months ago.
While this advice is technically true, I’m not sure how good of an idea it really is.
Doesn’t force independence – Community college means driving to school everyday from home. Then driving back. To parents. To routine. To Mom doing your laundry. Not exactly a new independent lifestyle.
Hard to stay motivated -This might just be me, but I think I would find it hard to be motivated for school when I’m only 20 minutes away. It just feels too much like home and an extension of high school. Of course, the “new” feeling at a school that’s further away will wear off, but the location is still going to be strongly associated with “school”.
Not a lot of college life – No room mate craziness. Little if any athletic presence. Less diversity.
Community college of course is way cheaper than any 4 year university. That’s obviously a big plus. If the option is between going to college and not going (and you actually want to go!) then community college should be where you’re headed.
This topic has made me realize how lucky I am. Growing up, it was just a given that I was going to college after high school. No other option was ever discussed. So I never thought of a 4 year school as a luxury. But indeed it is! I’m spending about 8K this year just to live on campus. I could drive everyday to school (45 minutes away) and save a ton of money, assuming gas doesn’t go up to $10 a gallon. But I’ve made the choice to spend thousands of dollars on the “college experience”. Whether or not that’s BS remains to be seen.
Yes, I’m Young. No, It’s Not a Problem
If there’s one thing that aggravates the hell outta me, it’s when people assume I don’t know something or can’t do something because I’m only 18.
For the most part, there aren’t a ton of people who treat me like a 5 year old. Pretty much all my co-workers are at least twice my age but they seem more impressed by my young age than anything else. Family members usually consider me responsible.
But there are enough people that just don’t get it. I’m talking about:
Companies – ING Direct wouldn’t let me open a checking account until I was 18 even with an adult co-signer. None of the major car rental chains will rent you a car unless you’re at least 25 years old! Many hotels want someone at least 21 to check-in.
Random conservative adults – I usually lean left on most issues, but not all. I’ve heard comments like “Well most people are liberal when they’re young. Then they enter the real world and become a conservative.” Um…OK? I’ve always felt like my opinions were well thought out. I don’t expect everyone to agree with me, but to say that my feelings are “just because I’m young” is ridiculous.
The government – I can vote and drive a car, but a beer is simply too much to handle. I won’t get into the drinking age argument too much, but I just don’t understand it. Cigarettes are completely acceptable, but alcohol requires an extra 3 years of maturity? Sure…
Does your age ever annoy you? Anybody ever say the dreaded “Aren’t you a little young…?”
Complaining About Money Won’t Make You Richer
(don’t) cry on Flickr! by Pedro Klien
Am I only one with a friend who’s overly negative and complains all the time about money? I’m guessing not, but I’ll still share my own “friend-who-bitches-about-money-and-work” story.
I’ve mentioned that I scored a job this summer at the Census Bureau. We can’t move forward until you mail it back,™ by the way. Well Uncle Sam is kind enough to pay me $10/hr for my time. That’s a great rate for someone right out of high school and looking to have some fun this summer and save some cash for college in the fall. Most adults I talk to are impressed that I landed this job. Most of my friends are surprised how much I’m making and how many hours I’m working (35-40).
Yet, there’s one friend of mine who can make me feel like crap about my job. He says all the time how lucky I was to get it. Then he complains how it’s not fair that he only makes $5.50 at his job and gets few hours. Finally, he reminds me how lucky I am – again.
The whole situation annoys me and I hate discussing anything work or money related with this person. While luck and chance do play a part in all of our lives, it’s ignorant to think that I only got the job because I was lucky. I found the Census Bureau’s website and spent a good hour reading over the materials they had. I located my local office’s phone number and street address. I called and scheduled a placement test. I called back a month later to see where I stood.
I did things. No, they weren’t super hard or anything to brag about, but I did them. And if there’s one thing I’ve learned growing up it’s that so much of making life and money work for you is simply doing things. Small things, but things. You have to put some effort out! It was a process and that is why I’m now earning $300 a week and my financial picture has never looked better.
Then there’s the whole issue that my friend only makes $5.50 and “it’s not fair”. Honestly, I want to tell him boo hoo. He didn’t have to take the job in the first place. He could have easily applied at a bigger retailer that pays minimum wage. $5.50 sucks, I won’t deny that. But it’s better than nothing and beggars can’t be choosers.
It frustrates me when people act like the Man is out to get them – especially when the person just graduated high school and has every opportunity in the world to do something great.
Do you know anybody who complains about their situation without doing anything to change it? Is the Man really out to get some people?
Prius Lovers: Cover Your Ears, I’m About to Get All “Drill, Baby, Drill!” Up In Here
Prius owners and hypermilers, you’re not going to want to hear this. You should probably consider leaving now or at least scrolling down to avoid this post…
I drive a Ford Explorer. It’s a mid-size SUV, weighing about 4,200 pounds. For comparison, a Honda Civic weighs about 2,200 pounds. I get roughly 17 miles per gallon in mixed (city/highway) driving.
But I still like my SUV.
That probably sounds odd from someone who writes a personal finance blog. I won’t pretend that SUVs are good for one’s finances (or the environment). They’re not. Even with that admission, I still feel confident that I’d buy another SUV, if I was in the market for a new vehicle – and could afford it!
Humor me, if you will, while I try to justify my choice of automobile.
1. The Room!
The front seats are ridiculously comfortable. There’s so much space! I have plenty of head and leg room, with no need for compromising. Although I’ve never ridden in them, I imagine the back row of seats is plenty comfortable. At least, none of my passengers have ever complained.
While my SUV “only” seats five, it can also hold my friends’ book bags, gym bags, and all other types of bags. So if we ever want to go anywhere together, it’s nice to have the space for all of our stuff.
2. The Utility!
I don’t tow a boat every weekend, but I do occasionally go biking with friends and we were once able to fit three bikes (and three people) inside my Explorer. I also needed to carry some supplies for a science project last year and there’s no way they would have fit in a typical sedan. I also use 4 wheel drive in the winter and it’s definitely an advantage.
3. The View!
I can see everything! I’ve driven a friend’s Chevy Cavalier and I’m not a fan. For one, I felt like I was sitting just a few inches above the road. Then, I had trouble seeing out the back and the sides. And my knees were up to the steering wheel.
4. The Safety!
Yes, I know large vehicles take longer to stop and aren’t awesome at quick maneuvers. But in an actual collision, I’d prefer to be in the bigger vehicle. You aren’t going to catch me in a Smart For Two when Chevy Tahoes are being driven by distracted soccer moms. The rollover issue is something I’m not too concerned about. Mainly because most rollovers occur because the driver did something stupid: turned too quickly, over corrected, or didn’t slow down for the curve. I can prevent all of those by driving responsibly. I can’t, however, do anything to stop another driver from t-boning me.
About Those Environmental Costs…
It’s not that I hate the environment. I don’t. The pictures from the BP oil spill are horrible. But for now at least, I enjoy my SUV. If it makes those of you who are shaking your head right now at my gas guzzling tendencies feel any better, I will be paying out the ass for gasoline in just a week or so. Oh, did I forget to mention that my dad has paid for all of my gasoline during high school?
I’m not making my case any stronger, am I? Here I am telling everyone how awesome my SUV is while I don’t have to pay any of the costs. How very American of me… Don’t worry, as a graduation present of sorts I’m guessing, my father has informed me that he’ll no longer be footing the bill after Sunday.
Anyway, gas is expensive. In my area, it’s currently hovering around $2.42 a gallon and I’m filling up once a week. So I’m looking at an expense of about $150-$200 every month. That’s a decent chunk of change and I’m no doubt paying for the privilege of owning a big vehicle.
Reflections On the Mortgage Crisis
This guest post is brought to you by The Digerati Life, a personal finance site that offers stories, news and opinions about money management, real estate and investing.
The 2000s will be remembered for many things: Y2K, Obama and the Beer Summit and the decade of the worst global economic recession ever. I’m not sure about you, but these aren’t necessarily the kinds of memories I’d like to hand down to my children or my children’s children, if you know what I mean. Of course, it’s better than Woodstock, but the ramifications of what has transpired over the past 10 years in the financial industry will haunt us long after the smoke clears and cold, hard sobriety sets in.
Take the mortgage and housing industry for instance. Just a few years ago, it seemed like getting a mortgage was as easy as…well, getting stoned. Lenders lined the streets, holding out their mortgage products, tantalizing us with their pretty colors, whispering into our ears that so long as we paid just this tiny little payment every month, we could all live in a house like movie stars. All that mattered was that you had a job, had the best credit cards that allowed you generous credit lines, and maybe even an emergency fund in a high yield savings account you can tap for collateral or a small down payment (if at all).
The goal was simple: get as many people hooked as you can before the bottom fell out. And they did. People came out of the woodwork and out from under the rocks they had been living under for years at the thought of owning their own homes. Adjustable rate mortgage? Okay. Interest only loans? I’m game, but only if I can buy that $300,000 house I saw on the Internet for only $200 a month. Besides, most of us had no idea what all that stuff meant anyway. The way we figured it, it’s best to leave the mortgage mumbo-jumbo to the professionals and sign where we’re told to, right? It’s the lenders’ job to keep us out of hot water.
But then the housing bubble burst, thanks to Hurricane Katrina, an expensive war on terrorism, and a few other little unexpected events sprinkled in for good measure. We started losing our jobs. We couldn’t afford gas. Food prices started to escalate and suddenly, we had to make a choice between heating our homes and feeding our families. And that little monthly mortgage payment starts to inch up too, thanks to interest rates that were out of control. One by one we started losing our homes to the banks.
Foreclosures started to trickle and then to gush and ultimately started to bleed the financial industry dry. All of those lenders who had stayed away from subprime lending were breathing a nervous sigh of relief, along with those that were smart enough to originate their risky mortgages and then sell it to someone else. For those who hadn’t, the bankruptcy and failure were real possibilities. Hundreds of small banks failed and many more struggled. Larger bank failures threatened the very existence of the modern economic world as we knew it. Not knowing what else to do, the government started throwing taxpayer money at them in hopes of staving off the inevitable.
And then came the indignation from us, the homeowners who wanted to know where our bailout was. We’d made some bad decisions, but it wasn’t our fault. We didn’t know what an alt-a mortgage or a 3-year ARM was. The lender didn’t tell me that I owed the balance of my mortgage at the end of 5 years. They were supposed to tell us. It’s the greedy financial execs fault. They tricked us…or did they?
Common sense should‘ve told us how big of a house we could afford. Common sense should’ve told us that there’s no way that a $300,000 house could possible yield a $200 a month payment without some serious repercussions on the other side. And yet, we took to the streets, pointing our collective fingers at the financial giants claiming that it was the job of the lenders to protect us from ourselves, just like they always had, by denying us the opportunity to get a personal loan or obtain a mortgage we have no business getting in the first place, right? The truth of the matter was, we wanted to get bailed out, too. If the government could bail out Wall Street, how about sending a little aid down here to the common folk on Main Street?
And then the government did offer a lifeline of sorts. They waved some money around at the mortgage lenders and made them a deal. Stop foreclosing on homes, offer your borrowers a chance to restructure their mortgages with debt consolidation loans, and get some cash for your troubles. Should have been a win-win, right? Wrong. First of all, most of us couldn’t afford the mortgages we took out back when there were two incomes. Now that there are many households with only one income, or worse yet, nothing but unemployment, any mortgage payment is simply too much. Second, the home loan modification program would only allow those of us on the brink of foreclosure any relief. What about those of us who had been responsible and only took out a mortgage we could afford and, through no fault of our own, ended up with a house that can’t be refinanced due to limited income and bottomed out home values?
In the end, many hundreds of thousands of us were forced from homes we had the luxury of enjoying for a few years at least. We’ll tell our children of the days when we lived in giant houses that we couldn’t really afford, and at the time it was okay, because everyone else was doing it, too. In hind sight, it probably wasn’t a really good idea, but we dusted ourselves off, just like after Woodstock, a little more mature and a lot savvier and look toward the future and not back at the past. Sure, there were a few casualties of the era, but in time, we’ll look back on the experience and the bitterness will be replaced with a hard earned life lesson that will be passed down from generation to generation. We’ll teach our children to rely on themselves and not the government, or lenders, or even our neighbors to bail them out when they make foolish decisions. We’ll teach them that it’s no one’s fault but our own if we get in over our heads because we chose to ignore personal responsibility in favor of greed. Consequences are an inevitable part of life and making bad decisions begets unpleasant consequences. Our children will grow up to make better decisions than we did, learning from our mistakes and creating a better world because of it.
What Kind of Relationship Do You Have With Money?
Money is a powerful force in all of our lives. This force can be positive or a negative, depending upon your relationship with money.
Everyone’s relationship is going to be unique, but there are a few types that probably describe many people.
Materialistic – money buys Stuff. High priced electronics, cars, vacations, etc. Money exists to purchase things.
Security - money’s purpose is to provide a safe-haven, like the security blanket children carry around everywhere.
Miser - security has long ago been reached, but you can’t stand the thought of spending (or giving) money.
These three categories aren’t nearly specific to sum up one’s entire money relationship, but I think we all know of a person or two who’s remarkably similar to one of these.
For me, my relationship has definitely changed over the years:
Childhood - money can buy me toys and should be spent as soon as possible.
Teenage - money makes the world go round. Some needs to be saved, but I can worry about that later when I’m an adult.
Now - money gives me options. Freedom. The ability to do what I want.
I think my relationship now is much healthier than it ever was before. I’ve come to think of money as a mostly neutral tool that can be used to either enhance or hinder my life.
What’s your relationship with money look like? Good? Bad?
