Things I Wish I Knew – Episode 1
Alright, let’s get started. Something I wish I knew.. how to set yourself up with good credit history so that you CAN get the car you want, credit card you want, and lifestyle you want without crippling yourself with bad debt.
Here’s what I did, and what I would NOT recommend doing.
- Had 2 credit cards in high school ( Kay Jewelers, and Victoria’s Secret) Did not have a regular go to credit card that accrued any kind of points, or credits.. nada
- Had numerous cars, that were given to me (hand me down cars, YES.. but very nice hand me down cars) Couldn’t afford the maintenance on them.. so would end up putting that cost on my parents to fix.. which made me truly not appreciate the awesomeness of having a car. I had no REAL value into the car by myself.
- Applying for FAFSA and signing everything, just seeing the dollar signs and not taking into account the interest rates on the loans or the difference between the loans
- Not saving any money (living paycheck to paycheck), and having no retirement set up. Wasn’t even a thought
- Not having any bills in my name
Here’s What I Wish I Knew
- Getting store credit cards are easy to get, but don’t actually help you in the long game.. more than likely you will end up closing them after 3-5 years.. and it’s bad debt. Try talking your parents into having you as an authorized user on one of their credit cards to help you build credit, or if they are sticking to their guns and not budging on that .. GET A JOB! Once you have a job you will be able to get a secured card through your bank, this is basically babies first credit card. You have money in your bank linked up to your credit card, and if you miss a bill it comes out of the linked up bank account so that your bills are always paid… and it doesn’t actually damage your credit. The great thing about a secured card is that you can’t overspend. You more than likely will have a low credit limit, and It will be declined if you try to go over that limit.
- If I had my actual own car, that I purchased.. I would have probably take better care of my car/cars. I also would have understood how much the cost of maintenance is for a nicer car, and would have opted for something a little less nice.
- FAFSA can be a blessing, if received and managed responsibly. I couldn’t have gone to college otherwise, and let’s be real.. having that money changed my life.. FOR THE BETTER. Hindsight is 20/20.. and this is why I’m here.. giving you this advice. There are 2 types of student loans.. Federal Loans and Private loans.. YOU WANT FEDERAL loans.. as much as you can.. you want Federal Loans. Private loan providers are not as forgiving, they will not work with you as much to set up lower payment plans, and ALWAYS have a higher interest rate that FUCKS you while you have your head in the books (or in the Keg) in college. Also, within these two types of loans is subsidized and unsubsidized. Seriously, there’s so much information within the receiving of student loans that is will seem overwhelming.. but the best advice I can give is to actually give yourself enough time to understand the process of what you are about to receive. Don’t sign anything until you truly understand what is written on the page. Not if your mom, or dad understand it will be enough when you are starting to pay them off.. YOU will carry this debt forever, and it’s the ONLY DEBT YOU CAN’T file bankruptcy for. KEEP THAT SHIT IN MIND! OK, getting back to the point.. if you absolutely have to get private loans.. try to subsidized loans.. this type of loan will not accrue interest while you are in deferment (in school). Unsubsidized loans will begin to accrue interest as soon as you sign your life away. I can dive deeper into student loan education in one podcast if there is more interest.
- Pay yourself first. Set up an automatic deduction from your paycheck that goes to your retirement so you don’t have to see it coming out, and you don’t even consider it part of your income. Then open a savings account that has a good interest rate, I have Barclays and it accrues interest at 2% currently, which is huge. Not an ad, just like having a savings account online that takes a little more work to get money out of. Maybe you put $50 a paycheck into your savings account.. Keep this for something you really really want. You’ll feel good about saving then.
- Get your cellphone in your name. It’s the easiest way to build credit and it will reward you again with more freedom. J
Ok. So I’ve given you 5 scenarios I did that didn’t work, and 5 scenarios that will 100% get you going in the right direction for more independence, while creating that AWESOME lifestyle you daydream of.
Spread the word, and make your life a little easier!