College is great…it’s probably the single biggest decision we make in our young lives. It’s a time of major transformation for most because for the first time, we have the opportunity to take ownership of all aspects of our lives.
For the purposes of this post, I’d like to examine the money and finances aspect of our lives during college…specifically the mentality of how we (by we I mean I, and by I, I mean a majority of the college population) keep track of income, spending, and saving. I had the mentality that since I was a ‘poor’ college student, it was pretty much alright to spend money on whatever I wanted provided my bank account balance was not zero and I wasn’t racking up credit card debt. I did not even consider the more “frugal” choice and weigh the opportunity cost of not considering my financial situation in the aggregate and what I’d like it to be in the future when I bought all of those lattes, beauty products, and beer. I just made emotional decisions based on really no logic other than I figured I wouldn’t do it forever.
Let’s take a step back…nowhere in here do I mention the small amounts of money I could have saved or invested thanks to the endless apps like Digit, Acorns, Betterment, and Personal Capital, to name only a few. Instead, I left those extra $5, $10 $20 balances in my checking account each week, which would likely get spent. It’s not that I wouldn’t have been able to save those sums if prompted, but because the money was there, it was fair game.
As I mentioned in my first post, I took a very dispassionate, detached role from my money. I think this is a common attitude that starts many of us out in a rocky relationship with money. If we aren’t holding ourselves accountable for looking at money and spending, there’s a pretty good chance we will manage it much differently than if we were. There is also an element of guilt that comes along with looking at our account balances or getting the credit card bill when we know we haven’t held ourselves accountable for spending. This attitude was not so much damaging in a financial sense, but more so in an emotional, psychological one.
So why have I just walked you through my spending habits from the greatest years of my life? Not because I want to remind everyone that there was literally a hit show during this time where these 30-somethings got paid to drink, tan and fold t-shirts,
No! Though it is fun to reminisce, that’s not why I’ve walked you through my spending habits up through age 22. The issue is that from the ages 22-24 I continued to spend with the a similar mentality–I could take it and run with it!
At 23, I got a full-time, salaried job, which meant I was earning more money than I was ever used to. Emphasis here is on the earning. I was doing all the things that I thought I needed to like have health insurance, save for retirement, pay rent on time, pay off my credit card each month, while managing to do other big-girl things like furnishing a home a home and caring for two small children.
photo via Rocky and Beau (not a great picture, I know, but I was really trying to convey the essence of chaos that having two male dogs affords us)
But I always sensed a tension from somewhere deep inside of me when making unplanned expenditures. It’s not that I couldn’t afford them in the most technical sense of the word, but when I looked at my dwindling bank account each month (in honesty it may have been more like each week), I felt guilty. I mentally added up the amounts spent on eating out, groceries, clothing purchases, hairstyle and constantly promised myself I would do better.
Again, it’s not like I was making completely unnecessary purchases, but I think I gave myself the liberty to buy much more than I would have had I set rules (not a budget, necessarily, because that doesn’t work for everyone) and known how much I should have been putting aside. It’s like I took my college spending mentality and tacked on the method of paying for new expenses that adulthood afforded me, then figured that the rest would be fine. In reality, this is a terrible system, because I never defined “necessary” from “unnecessary”. That “unnecessary” spending that could have been put aside and saved for something like buying a house, travel or investing in something big that’s important to me.
Due to a college mentality I realized about a year ago that unless I started making some rules so that I could start avoiding or deferring the “unnecessary” purchases and save that money instead, I might be holding myself back from making purchases in life that I have always considered “major” financial goals. Like a house. Or more dogs. Probably a house.
(This is not how it works, by the way. Found this out when we got the second dog. Photo credit)
The objective of this post is to share with you how the college mentality tripped me up, financially, for a couple years and how it has kept me back from saving money that could contribute to my future financial self. I’d like to continue to share some new money rules that have helped me more specifically grow the “unnecessary” fund as well as ways to save on expenses that fall into the more “necessary” categories in life. In the meantime I want to ditch the college MO and find better ways to save money and still have as much fun as I did in college.
In a future post, I’ll share more with you about the “pivotal conversation” I had with myself and my significant other where we realized we were not going to be where we wanted to be financially unless we made some changes. More dog pictures and personal financial anecdotes to come!
All the best,
#personalfinance #money #millennials #college #dogs