Over the weekend I was watching a show about personal finance. They were interviewing a handful of younger people, both in college and recent graduates. All had a high amount of student loan debt ($20,000) and some credit card debt ($5,000). Many of the people were saying how difficult it is to pay down the debt and many are just struggling to get by. The vast majority of them had jobs, so you couldn’t argue unemployment was the cause of their struggles.
The kicker that I noticed as to why most all of them were struggling was simple: they all lived beyond their means. None were living frugal. They all admitted they shopped at designer stores, had the latest cell phones, ate out most nights, had newer cars, etc. Sadly, they probably learned to live beyond their means from their parents. If you want to get ahead in this world and enjoy life, stop trying to compare yourself with others or care what others think of you. Start living frugal with your money.
Living Frugal Explained
I’m not saying live like a bum or never treat yourself to something special. I am saying try to delay your purchases and budget your money. Think longer term instead of “right now”. When you graduate, don’t go out and buy or lease a new car the minute you land a job. Stick with the one you have. If you don’t have one, buy a reliable used car that is a few years old. Learn to cook. You can still eat out, but try to limit it to once or twice a week.
If you want to be bold, keep living like you are in college, acting as if you are broke. It may not be fun right now, and you may feel down when everyone is heading to Mexico for a week long vacation (even though none of them can afford it so they put it on their credit cards), but in 5 years, when you have zero credit card debt and have the majority of your student loans paid off, your friends will be envious of you. You will be in the middle of buying your first home while they will be in even more credit card debt and still have a lot of student loan debt outstanding. Be Jane, not Jack.
Financially, you will be so much better off and by being this far ahead while you are young will catapult you into an even better financially sound position in the future, assuming you continue to live within your means.
Trust me: sacrifice a little now by living frugal for amazing times ahead. It is worth it.