I made some disastrous financial decisions in my college years, that spilled into my mid-twenties. It took me YEARSSS to correct my financial blunders.  Don’t be like me!

Bad Advice

Six very long months after I graduated college, I got a job in a new city. I literally had two weeks to find a new place to live. I drove the 3 hours and looked at a lot of sketchy apartments, but I ended up finding a one-bedroom apartment in a safe area near the city.  The only problem was the rent was 80% of my paycheck. One of my friends reassured me that one check was for rent and the other check was for everything else, which made sense at the time. I signed the leasing papers and I was financially stressed for the next two years.

Credit credit credit

I had a hard time keeping up with my other bills which caused me to miss payment dates and eventually led to some accounts going to collections. Since 35% of one’s payment history accounts for their FICO score, my numerous late payments caused my credit score to drop over 100 points. Having bad/poor/ fair credit will cause you to pay more for your car, home, insurance, etc (cost of bad credit).  Personally, I was disqualified from certain positions as some employers require good credit for employment. However, I was able to improve my credit score by keeping my credit card utilization below 10%, making all my payments before the due date, and disputing erroneous accounts on my credit report. Additionally, I have kept track of my credit score with Credit Karma and Nerdwallet which provides daily tips on how to maintain/improve credit scores.

Hello roomies

I finally had enough, I moved out of my apartment, found two roommates, and cut my living expenses in half. I was able to pay 90% of my bills with one check. I saved the remaining, paid off $4k in credit card debt, and bought a house (but that’s another story for some other time). I used the 50/20/30 rule, which is a good rule to live by: 50% of Your Income – Living expenses & essentials, 20% of Your Income – Savings & debt reduction, 30% of Your Income – Personal/flexible spending  (50/20/30).

Buy the damn coffee

Buy the coffee, tea, latte, macchiato, or whatever brightens your day a little bit more. I always hear people say buying a cup of coffee every day is a waste of money and it’s financially irresponsible blah blah blah (Coffee: A Waste of Money). Sure, you can save money by investing in your own coffee machine or not buying it at all. But, is buying a cup of coffee everyday really going to set you back that much? Probably not!  What’s really going to set you back are high a**car notes, the cable bill (Life without cable) buying the latest version of shoes, appliances, technology, constantly eating out, financing every little thing, etc. Basically, if you want to increase your savings account(s) and reduce debt, consider cutting the bigger expenses in your life before cutting out the miscellaneous stuff.

Happily Ever After-ish

After assessing my financial situation, I noticed most of my money was going to rent, car payments, hair bundles (no judgment zone), and eating out most nights. Subsequently, I made some gradual changes, stopped buying so many unnecessary material things, and paid off some bills early.  So, evaluate your financial situation, spending habits, and decide what you can/cannot cut back on to improve your financial situation and live your best life!

By: Guest Writer

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