While there are plenty of fast-talking late-night gurus out there who want to give you the information you need to get rich (all for the three easy payments of $29.95, but wait there's more...), the New York Times's Damon Darlin has some of the best personal finance advice that graduates don't want to hear:
- Save 10% of your income right off the top.
- Buy stuff used.
- Enroll in a 401(k).
- Don't borrow money to buy depreciating assets.
- Make your own coffee.
He offers two compelling reasons to start saving early. First, there's the most obvious one. Starting the cycle of compound interest early means your money will grow more. But then there's another one that I hadn't really thought about. Living below your means conditions you to be comfortable with a less expensive standard of living, which will also save you money in your retirement years.
There's another important thing to remember, and it's probably the best reason of all for being wise in your money management. I first realized this paradox when I was talking to my friend "Jim," who, after years of poor spending habits, has run up a huge amount of credit card debt, and lies awake at night worrying about money. He used to make fun of me for my Scrooge-like spending habits and obsession with saving as much money as possible. The other day, we sat down to discuss his problem.
"Ya know Zac," he told me, "I always thought you were way too interested in money, and that your focus on it interfered with your ability to have fun and focus on other things. But now, after years of spending too much and not being careful, all I can think about is money. No one is above money, no matter how much we want to be, and the more above it you think you are, the less you are. It's a challenge that we all have to master, and it's easier for some than for others."
Most people who have poor money habits aren't really that concerned about money. They view it as a pain, and they don't like dealing with it. Then they get into trouble and spend all their time dealing with it.
So worry about money a little bit now, and that way you won't have to worry about it a lot later.
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