Comments on: 5 Things to Do Before You Start Working

By: Debt Free Dude

Debt Free Dude — Wed, 15 Jul 2009 15:47:44 +0000

I agree that living below your means is the way to go when starting out on your own. Finances are tough enough to deal with without accumulating debt to top it all off.

By: Frank

Frank — Wed, 08 Jul 2009 10:11:01 +0000

In my opinion, the best approach if you are just starting out is to live on less than you make (allows for saving) and use a budget to plan spending. Avoid collection of extravent toys and the desire maintain the same lifestyle you had while you grew up. It is easy to forget sometimes that the life style your parents were able to provide (and that you have grown accustom to) was the result of their hard work and sacrafice over 20 or more years.

By: eric

eric — Wed, 08 Jul 2009 04:51:21 +0000

Well not in everyone’s case.

By: Studenomist

Studenomist — Wed, 08 Jul 2009 01:51:04 +0000

Understand that there is nothing wrong with living at home and using public transportation while you save up for a home down payment or pay down your debt. I’m a 4th year student and everyone is all excited about what new car they will pay or the downtown condo that they will rent.

By: Jim

Jim — Tue, 07 Jul 2009 16:08:49 +0000

That’s a good 6th thing to do, emergency funds are crucial.

By: Frank

Frank — Tue, 07 Jul 2009 16:01:40 +0000

I would agree with 4 of the 5 items. I would replace getting a credit card with creating and emergency fund. A verifiable job with steady income and a downpayment should be sufficient to get a mortgage. By definition a mortgage is a secured loan – secured by the property itself.

By: Patrick

Patrick — Mon, 06 Jul 2009 17:46:25 +0000

I was lucky enough to have been taught the above from my parents and saved my money, even during college. I know many of my friends though that wish they had learned these things before going into the real world.

By: Jim

Jim — Mon, 06 Jul 2009 17:36:48 +0000

It’s actually really easy to finish four years of school and have little experience with personal finance because you don’t deal with much money, relative to later on in the real world, in college. I agree with you that it’s a weakness.

By: Steven

Steven — Mon, 06 Jul 2009 16:27:05 +0000

I think it’s more amazing that this knowledge isn’t taught in high school, where attendance is mandatory.

By: Kevin at OutOfYourRut

Kevin at OutOfYourRut — Mon, 06 Jul 2009 16:17:49 +0000

Jim, excellent idea posting this for beginners to the real world.

It’s amazing that a person can come out of four years of college, degree in hand, but not having had any training in personal finance. Personally, I think it’s a fundamental weakness of the education system. This topic is too important to be ignored within the curriculum, no matter what the major might be.

By: Kyle

Kyle — Mon, 06 Jul 2009 13:22:46 +0000

That is true, unfortunately college is more about the party than keeping up with you spending

By: Jim

Jim — Mon, 06 Jul 2009 13:08:59 +0000

I think that it’s important to spend within your means. When I said it was OK not to budget in college, I meant it wasn’t as important to track every last penny and allocate each dollar. Spending within your means should be something you’re doing all the time, whether you track your spending or not.

By: Kyle

Kyle — Mon, 06 Jul 2009 13:00:44 +0000

I don’t know that I necessarily agree that it was ok to not budget in college. If I had done a better job of keeping my spending in check I wouldn’t owe quite so much in student loans now. I had to pay my own way through school and while I wasn’t earning a fortune I wasn’t doing that bad either.

By: Kosmo @ The Casual Observer

Kosmo @ The Casual Observer — Mon, 06 Jul 2009 12:58:47 +0000

Roths make great sense when someone is at the low end of their earning potential, as you’re paying taxes at the lowest rate, instead of paying future taxes at a higher rate. There is a lot of debate later on about which is better (I broke down some scenarios here -> http://www.observingcasually.com/roth-vs-401k/ ), but early in your career, Roth is a slam dunk.

Also, at the very least, you should take advantage of employer matching. If your employer matches contributions 1 for 1, this is an immediate 100% return on your money. This is an unbeatable return.