As I approach my 30th birthday this year, I figured I would share 5 things that I wish I had done by the time I was 25 years old. Some things are financially based, others would have simply been for my mental health. Take what you want from this, and “experts,” please keep your comments to yourselves. This is simply my take on what I wish I had done differently. 1. Live with your parents for as long as possible: While some people may not have the option to live with their parents after graduating from College, many graduates don’t have another option in this day and age. With rental costs hitting astronomical amounts, it’s hard for people entering the job market to figure out how to make ends meet. I know my first job out of college netted me about 1,400-1,600 bucks a month, and with rental costs in the city I worked in nearing $900-1,400/month for a small apartment, there was no way I could have paid for rent, a cell phone, gas, groceries and insurance on my own. Luckily, I decided to live with my parents for about 9 months after graduating and was able to justify the longer drive to work for the money I saved in rental costs. The hardest part was getting used to not living on “my own,” as I had done in college. However, I wish I had not been so fast to find a job that allowed me to move out of my folks’ house as early as I had. Utilize living in your parent’s house as a way to quickly pay off your student loans or even start padding a savings account heavily. It’s hard to justify taking a brand new job in a brand new city without much savings. Set yourself up for financial success by saving as much as you can, and not throwing your money away on rent. You will be amazed at how quickly you can save $10-15K in a year or two when you don’t throw money away on rent, and you can quickly invest that money into step #2 below. 2. Buy a House as quickly as you can: My first rental property I lived in wasn’t fancy. It wasn’t all that expensive either. However, one thing that hit me after 2 years of paying rent for a 1 bedroom apartment was that I would never get that money back. For those that live in cities that allow for first time home buyers to slip into something in the $85-$130K range, I would do so as quickly as possible, as long as the mortgage (+ Taxes & Insurance) stays in the 18-25% range of your monthly income. Normally, the mortgage would be significantly less than if you were paying apartment of house rental costs, and cheaper houses are usually cheaper to maintain. Plus, when it comes time to getting married, having kids and moving into a larger home, you will have had a few years to build equity into the property and could move into a larger home for little to no cost out of pocket – this is key. You don’t want the first house you buy to be in the $250-$400K range. Start small, and build up your equity in the property quickly to ensure more financial freedom in the future. 3. Put off buying cars for as long as possible: I love cars. I love cars so much that I want to experience them all. Everything from sporty luxury sedans to jacked up trucks, I love them all and want them all at some point throughout the year. The biggest problem with this, however, is that unless you have a car that is paid off, and worth a good amount of change, you will always be “in the hole” when it comes to needing to trade in or trade up, either in size or quality. Chances are, the Honda Civic you drove through college will still last you until you turn 27. Just deal with it and enjoy not having the payments. Put $200-$300/month that you would have put towards a car payment either as extra principal towards your mortgage or into a savings account. That way when baby number one (or in our case, Baby #1 and #2 simultaneously) come into the picture, you have a good amount of money to invest as a down payment and you can ensure that the car is worth more than you owe on it at all times. If you find yourself staring at an expensive repair bill, which is hard to justify or even a scenario that requires you to upgrade in vehicle size or cost, you want to make sure your car is an asset to your financial situation and not a liability. 4. Find a hobby that has nothing to do with your career or revenue streams: Are you a banker but love home decorating? Awesome! Start a blog and share your passion with the world, but don’t let your “hobby” become a revenue stream. Once your passion turns into profit, it will no longer have the luster it once had. Pick up a relaxing hobby, such as, cycling, fly fishing or even kayaking. Something that forces you to do something completely different than you do for work, and never allows the lines to become intertwined. Whether you take 2-3 hours per week towards learning to play an instrument, in the mountains hiking or even at the beach surfing, those 2-3 hours per week will help your 40-60/week at work don’t become the only things you do in life. 5. Keep your relationships with friends strong: Gradating from college can be scary time for us all. We decide that we need to put our heads down and focus on building our careers, and a lot of times, do so at the expense of keeping up our friendships from college or even high school where they should be. When you don’t have the financial obligations or children or even pets, use some of your extra cash to fly out (or drive) and see your friends multiple times per year. The relationships that you keep healthy will be your biggest support system when it comes times to get married, or even when you just need someone to talk to. BONUS: Find a mentor: As we get older and leave the comfort and security of our parent’s homes, we need to ensure that we have a solid voice of reason that we can confide in at times. For some people, their mentor may be a family friend who works in a similar career field as you do, or it could simply be a stranger you meet through networking events. The key would be to find someone that has your best interests in mind; is quick to offer advice, but not always a solution. If you only instill trust in people that want to offer you jobs, they may not always have your best interests at heart. Learn from their experiences, and apply their mistakes to your own journey.
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Adam P. PfaffCurrent Musings. Incessant Ramblings. Enjoy. Archives
December 2018
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