Tuesday, May 23, 2006

my ten month plan....

...to get out of credit card debt is going along quite nicely, thank you very much. Provided i don't need to use it for anything i should have those bums at Chase paid off in January. Though I am remarkably fortunate that i didn't fall into the the horrible cc debt that some college kids do, i did crank up my share of debt. the highest my balance ever was was $4500. but i have never ever, since graduation in '97, had a true $0 balance. I came close about two years ago, but my foolish brother needed to charge his car insurance, and it was all downhill from there.

here are my tips for soon to be grads or recent grads. i'm no suze orman, but i have learned a thing or two since college.

1. Do not get that perfect car right out of college. drive a few years in a banger. you will save on car payments and you will save on car insurance. Car loans are a sure way for you to get in over your head before you are ready.

2. Do not over spend! It seems so trite and obvious, but it is not an easy thing to do. Do your best to ask yourself, do i want or do i need that item? is it a good investment? will i get true value from it?

3. Set aside part of your paycheck every week to a SAVINGS ACCOUNT. for instance, if you take home $525 every week, then set aside $25 of that to a savings account. (it's very easy to do this if you can get two direct deposits. one to your working ckng acct and one to your svngs acct.) this is a key to saving! $25 clams is not that much! a person can live quite comfortably on $500 take home a week. (i know, i have been living on $472 weekly take home for the past six years) If you deposit just $25 a week from the moment you graduate, then in ten years time, you have $12,000! that is a down payment on a house! I cannot stress that you must start saving little by little right away!

4. pay your bills on time and faithfully. aside from what i see as something akin to a moral obligation to do so (you did sign whatever contract you did to get the account in the first place, and signing the contract is an agreement and promise to pay the money you are credited, or paying for the service rendered) Aside from this, if you pay things late, or go over your balance, you are punching yourself in the financial gut every time! every time! Credit card companies do a happy dance every time a peson pays late. A late fee is found money for them, then on top of it you have to still have to come current. if you don't come current by the next statement, another punch in the gut. you can see how shit might roll down hill on this.

5. Don't over draft your checking account, and don't skate the lines of postdating or paying with a check before the funds are actually in your account. A bounced check just ain't cool. (refer to tip #4. bouncing your payment or bouncing a check at a store results in late fees and usually bounced check fees from the payee, and from your own bank too). also, passing bad checks is fraud. and if the company thinks you've done it intentionally or too frequently, you can actually be arrested and prosecuted. Again, shit rolls downhill on this one

All i can do is tell people be smart. have a sense of balance in your finances. have a sense of your actual balance, have a sense of what you've already paid out, and have a sense of what your actual style of living calls for. Be sure to weigh purchases as investments- what value are you getting for what you are paying. as long as you feel you have gotten good value when you make a purchase- big or small, you are ok. remember carrie bradshaw from the surprisingly insightful hbo show sex and the city. she had 100 pairs of $400 shoes. lets all do the math-$40k.
That's a lot of money invested for squished toes.

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