Probably the best thing my dad did while I was in college was require I do a six month cash flow projection every semester.  As an accounting major, it was an appropriate exercise.  

I think it is a good exercise for all college students – especially as they graduate.  It was one of the best life lessons for me.  

Now decades later of working with people and money management, I’m still sharing the lessons I learned in those college years.  

What would I share with all students ready to launch into life and adulting?


Once you turn 18, finish school or graduate from college, you are on the creditors radar.  You are a promising new market.  Your mailbox and email will be filled with credit card offers.

Credit Cards are NOT FREE money!

Yes, you can buy an item right now, today.  Yet you will be paying for it over the next few years.  That big screen TV may cost $2,000 but with interest rate of 21% you have effectively added another $1,000 to the cost.  Would you still want the biggest TV if you knew you would be paying half again as much to have it today?  The shiny newness will be long gone before you have it paid for.  

If you have a credit card, pay it off 100% each month.  Pay it on time.  Late fees are expensive and they damage your credit rating.


When you get your first ‘real’ job, you may feel compelled to get a new car.  After all, you have earned it.

A brand-new car comes with a huge price tag and a heavy car payment.  Yes, you can lower the payment by spreading the total payments out over more years.  As the car gets older, your repair costs tend to increase.  You will want to replace the car with a new one.  You end up replacing the repair bills with a bigger car loan payments.

It can become a vicious cycle.  If I had it to do again – I would save to buy a good used car with cash.  I would then save the $$$ I didn’t spend on a car payment in a new car fund.  When I had saved enough to buy a new car or a gently used car, I would pay cash.  I would continue to save ‘the car payment’ for my next new car.

I hated the thought of thousands of dollars we were paying on car loans.  That was my motivation to break the cycle and pay cash for our cars.  

Our society has accepted carrying credit as ‘normal’.  However, I have seen credit destroy lives.  Finance is one of the top reasons people get divorced.  Debt restricts choices and is a ball and chain on your life.   

I have spent hours coaching well educated adults, how to manage their money – reduce their debt.  

I wish I could impart that wisdom before people began using credit.  When they are fresh out of school.


Living on a college budget creates a lot of pent up demand.  It is easy to over extend if you are creating the lifestyle your parents have – without the same paycheck.  

Our society blurs the lines between needs and wants.  You need the four basic walls – Housing, Food, Transportation and Clothing. 

But you don’t need the latest gadgets – cellphone, tablet or TV.  You do need to eat.  Learning to cook helps reduce your food costs.  Dining in is cheaper than dining out every meal.  

Living below your means takes practice.  A budget is helpful to create the picture.  Determine what your regular monthly expenses are.  What are your non-monthly expenses?  Car repair, clothes, gifts and Christmas, vacation, pets, medical, insurance.  

Most people won’t track the detail of their monthly spending.  However, if you set aside your non-monthly expenses into a savings account, you don’t spend money that is already ‘spent.’

I call this savings account a buffer account.

You add the monthly average of your non monthly expenses into the buffer account.  You withdraw what is needed to pay for car repair or insurance.  The best gift you can give yourself is to have Christmas paid for before Christmas!         


Living below your means allows you to put money into savings.  In addition to your buffer account savings, an emergency reserve is helpful.  Creating a savings account of six months living expenses provides a cushion when the bumps in life happen.  If you lose your job, have a medical crisis, an emergency reserve helps you pay the bills while you find a solution to your crisis.  

Retirement savings is the third pocket of savings to create.  Yes, retirement seems a long way off – there is so much more fun ways to spend your money right now – today.  Think of retirement savings as putting money away for future fun.  

The sooner you start putting money away for retirement, the less money you will need to save.  You can let the power of compound interest work for you.

Compound earnings is your money making money.  Earning interest on your interest.  

For example Sam Saver put $100 a month into an investment earning 8%.  He did this from age 25 to 35.  And he didn’t make any more contributions to this account.  At age 65 Sam Saver would have accumulated $177,103.  He invested $12,000.

Danny Delay waited 10 years before beginning to save money for retirement.  At 35, he put in $100 a month for the next 30 years.  At age 65 Danny Delay had accumulated $136,946.  But he invested three times as much or $36,000.

Make the time value of money work FOR you.


If you are fortunate to have an employer with a retirement plan, use it to your advantage.  Most employer’s retirement plans have a matching contribution.  For example:  They may match 50% on every dollar up to 6%.  You contribute 6% – they contribute 3%.  That is free money although you have to stay past the vesting period to keep all of the employer contribution.  That period can range from 3 years to 7 years.  

Take advantage of your employer matching.  Another reason to contribute to a retirement plan is because it is tax deductible.  You put in $1,000 over the year, you could save $120 in Federal taxes if you are in the 12% federal tax bracket.  You also receive a state tax savings as many states have an income tax.

If your employer doesn’t have a retirement plan, make one for yourself.  Start an IRA.  You can contribute up to $6,500 a year.  Remember the earlier example, contributing $100 month adds up over time.

Adulting is easier when you avoid debt, live below your means and Save, Save, Save.


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