海角大神

It鈥檚 a simple question, and one I think about surprisingly often.

Let鈥檚 say I could magically roll back the clock to the end of my final year in college. I鈥檓 single at the time, but I鈥檓 planning on getting married in the next few years. I have a job lined up, but I鈥檓 not sure how secure it is. At the same time, I have a pile of student loans that I鈥檓 about to face 鈥� $40,000 or so 鈥� along with a car loan and some credit card debt.

What鈥檚 my game plan? What would I do at that point to get myself in the best possible financial shape today?

Here鈥檚 exactly what I would do. I believe that most people in financial or professional challenges can draw some useful ideas from what I鈥檓 describing here.

First, I would continue to live much as I did in college. That first job out of college is a big raise in money and it鈥檚 really tempting to 鈥渓ive a little.鈥� However, 鈥渓iving a little鈥� without a good financial foundation is a pretty big mistake. I鈥檇 avoid it like the plague.

What I would do is figure out what I was bringing home each month before getting the job 鈥� plus, say, 20% for professional expenses 鈥� and add to that the monthly cost of student loans. That鈥檚 how much I would keep in my checking account. The rest would be saved.

In other words, for a while, I would continue to live on my college budget, plus a little extra in order to ease into my professional life.

The next step? The first day of work, I would sign up for the retirement plan there and contribute at least 10% of my income. I would be unhappy if I were saving less than 15% of my income, including any match I got from my employer.

The day my first paycheck arrived, I would leave my living expenses 鈥� mentioned above 鈥� in my checking account and move the rest to savings. This would be my emergency fund. I would keep building it until I had a month鈥檚 worth of living expenses in that emergency fund.

Once the emergency fund was built, I鈥檇 start whacking away at my debts by order of interest rate. All of that extra money each paycheck would go toward making giant extra payments on my debts. I would keep whacking on them until they vanished.

The real challenge here is to avoid the temptation to spend and to inflate my lifestyle. If I learned one lesson from my experiences with debt over the past decade, it鈥檚 this: if you have debt or if you aren鈥檛 saving enough for retirement or your big goals, you just don鈥檛 have enough for that new, shiny thing you want. Sure, you might be able to come up with the cash easily enough, but that doesn鈥檛 mean you can truly afford it. It just means you鈥檙e choosing to sacrifice something you need that鈥檚 not particularly urgent for something you happen to want (and that want usually is urgent 鈥� you want it now).

A need that is not urgent should always trump a want that is urgent. Just because something is urgent doesn鈥檛 mean you should convince yourself that a want is more important than a need.

A final step: if I found myself not using something, I鈥檇 put a piece of masking tape on it. On that masking tape, I would write a date one year in the future. If I found an item with a date on it that had already passed, I鈥檇 sell that item. There鈥檚 no reason to keep around items that you use less than once a year. If you use something that infrequently, then the financial value of that item is more than whatever usefulness it has for you.

There are two other things I would do as well that might not seem like they鈥檙e financially related, but they can really come in handy over and over again in professional, frugal, financial, and social ways.

First, I鈥檇 work on establishing strong friends. This means I鈥檇 shelve the idea of talking bad about anyone, particularly behind their back. This means that when someone asks for help, I鈥檒l provide it if possible. This means filling up as many lunches and evenings as possible with social activities that can actually build strong and lasting relationships. A night at home alone every once in a while is great, but a night where you鈥檙e building lasting friendships is better. Such friendships come in handy again and again and again throughout life. The more you have, the better off you are.

Second, I鈥檇 figure out my career path. I鈥檇 look to find a professional mentor in my career path, someone who had achieved many of the things I wish to achieve, and I鈥檇 pick that person鈥檚 mind a lot. What do I need to do to get from where I鈥檓 at to where they are? I鈥檇 also apply the same philosophy to workplace relationships as personal ones 鈥� avoid negative talk, help people when they need it, and build connections with people. I would also spend time building my professional skill set through taking classes and freelancing whenever possible.

These two things would fill up my social calendar with activities that should both be enjoyable as well as personally and professionally fulfilling.

I didn鈥檛 do a lot of these things during my first years after finishing college. In fact, I didn鈥檛 really know I should be doing them. Luckily, I was still able to find a path that worked, but I made many mistakes along the way.

Everyone is going to make mistakes. That鈥檚 life. The key thing is to constantly look at yourself when things go wrong and ask yourself how you can improve the next time around. What can you do starting right now to make sure that this problem doesn鈥檛 happen again?

I鈥檓 happy with my life as it is right now, but this is the advice I鈥檒l be giving my own children when they鈥檙e about to head out on their own for the first time.

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