Saturday, January 31, 2009

Financial Hindsight is 20/20

I am getting a tad introspective in my last weeks of my 24th year. I started thinking recently about how if I knew what I know now, I would have made some financial decisions differently in my younger years. I have learned a lot from my experiences over the last several years but financial hindsight is definitely 20/20. Here are a few decisions (some of which have been discussed on this blog in past posts) that I would have done differently if I could jump in a time machine and magically be back in 2002:

Attending a public college in my home-state, rather than a (semi) private one in another state (well District if you want to play with semantics).

At the age of 18, it was a big deal for me to go away for college, though I am only about 2 hours away from home. I didn’t really think about things such as the differences in cost of colleges and universities back then.

Opening a Roth IRA when I started working in college.

During my sophomore year, I had a friend in college who was much more financially savvy that me that told me she had a Roth IRA and contributed money into it that she earned while she worked during the summers. Before talking with her, I didn’t even know exactly what an IRA was, but she explained that it was a vehicle that you could invest money for retirement in. How savvy was she (and her parents who helped her open the IRA) to start investing in her retirement at such a young age. Considering that though I did save some money when I worked during college, a lot of it got frittered away on things I can no longer recall like club outfits and other expenses that seemed “necessary” at the time.

Taking on more diverse internship experiences while in college.

I also could have taken notice and followed in the footsteps of another friend (who was also in the school of communications at my college) that had internships in just about every facet of communications you could think of by graduation. Her resume was very extensive and deservedly so because she had been so diverse in her college work and volunteer experience. I on the other hand, had internships at corporate public relations firms. My internship experiences were great, but I could have done one or two more in say advertising or print journalism to round out my college work experiences a little more. Even if it wasn’t such a scary job market, having a diverse skill set and work experiences can only help you.

Living at home for the first two years out of college instead of living in a different city.

I was so antsy to be independent and start working that I immediately took my first job offer in DC after getting frustrated that my job search in other cities including my home-town was slower. In hindsight I realize that I will inevitably work for the next few decades and taking a few months after college to find a job and living home (while paying rent to my parents of course) would have been a wiser decision than taking up the considerable start-up costs it takes to live on your own while working for the first few years after college.

Not accumulating credit card debt.

Credit card debt is evil! It is much harder to get rid of it once you have it, like a mysterious food stain that you just can’t get out of your favorite pair of pristine white pants. Credit cards are great for rewards points and such, but only if you don’t carry a balance, which I unfortunately do. But I am serious about paying them off in 2009! It would be great if I didn’t have this debt in the first place though.

Taken measures such as working full time and attending college part time as a way to incur less student loans.

I have another friend who works at the college he attends full time while going to class part time. What an excellent idea, it would have been great if it had occurred to me a few years ago. I really enjoyed being a full time student, but I do not enjoy having more student loan debt that my annual salary. I didn’t know back then about that rule of thumb that your student loan balance should not exceed more than you will make in your annual salary.

But since I have not yet figured out how to travel back in time, I’ll have to chalk up my good financial decisions and bad ones and make sure they are good ones going forward.


Cents in the City said...

The biggest mistake I made was choosing to work to make money waitressing over finding an internship. It really hindered me after graduation, when I was looking for a real job.