Being 27 years old, I have experience in this area.  I want to share their list, and also some insights about how well I’ve followed their instructions.

1. Plan Ahead

You need to have plans and goals that account for the short term (less than 5 years), medium term (5-10 years), and long term (20+ years).

I didn’t do this, but wish I would have.  I have goals now, but that’s after I’ve bought a car and house – the two biggest financial decisions I’ve made.  I would’ve saved a lot of money by planning for them more than a few months in advance. 

If I had a bigger down payment for my house, I could have gotten a better rate on the mortgage.  Even a down payment of $10,450 would have saved me close to $60 a month, and more than $22,000 in interest over the course of my mortgage.

2. Live within your means

Another one I ignored at my own expense.  When I first got a job, I actually increased my credit card debt.  Not an uncommon story, but its an expensive one.

The best time to get ahead is our early years…you don’t want to be burdened with debt from the beginning.

3. Make Savings a Habit

A swing and a miss!  My money goes to pay off debt now, so I still don’t have any savings to speak of.  But what I should have done – even before my first paycheck – is set up an automatic deposit from my paycheck that goes right into a high-yield savings account.  I never would’ve missed the money, and I would’ve gotten used to living off of 10% less than I was earning.

4. Pay off your credit cards

Credit cards are expensive.  I did a great job of paying off my credit card debt after I got a job.  Then I wracked up more debt because I didn’t have savings.  Granted its on 0% interest cards, and I should be able to pay it back before the rate expires, but still…its a bad feeling to have credit card debt.  The sooner you pay it off, the better you (and your bank account) will feel.

5. Start investing

The beauty of investing is compound interest.  It has a greater effect if you start early.

The article gives an example of a 25 year old who invests $200 a month, and earns an 8% return on it.  By the time he turns 65, he’ll have $703,000 in his account.  However, if he waited to start until he was thirty, he’d have only $462,000.  By starting 5 years earlier, he makes $241,000 more off of only $12,000.

This is one of the few things I’m doing.  I’m contributing a decent amount to retirement, but it could be more.  I plan on opening a Roth IRA on top of the money I’m already investing in my 401K.

6. Establish Credit

This is something that should be done in your teens if possible (and if done responsibly).

Length of credit is a big part of your credit score, and its the only thing you can’t do anything to change.  By getting a credit card ASAP – and paying it off each month – you build credit, and your credit score will be in a much better place when you start applying for car loans or mortgages.

I got a credit card soon after I started college, which helped me build great credit.  Unfortunately I also used the card irresponsibly.

7. Have a marketable skill

Before you start working, you should think about where you want your career to be in 10-20 years.  Everything you do in your 20s should be building the skill set you need to achieve your goals.

It’s never too early to start specializing or networking.  If you know what you want to do for a living, start working towards that in college by building real-life, applicable experience.  It will give you an edge over other entry level employees.

This is another commandment I’m following, but I could be specializing better.  I feel like I have a good skill set, but its too broad and not deep enough in any one area.

8. Cut the financial umbilical cord

If you want to be treated like an adult, you have to act like one.  You need to balance your own checkbook, do your taxes, and manage your investments.

You have to take responsibility for your finances as early as possible.  No one else will care about your money as much as you do.

9. Marry Wisely

Although it sounds vulgar to think about marriage and money in the same sentence, money causes more divorces than anything else.  Before you get married, make sure that you talk about finances and share a similar mindset, including goals and priorities.  If you don’t, make sure you take the time to work out your differences, because it could blow up later.

10. Have some fun

This is the only thing on the list I’ve really done well.  It’s important to have fun, and it’s important to be responsible.  The trick is to keep it balanced.

I thought this was a great list.  The unfortunate thing is that many people – myself included – learn by doing the wrong things when it comes to money.  I wish that more parents, colleges, and even entry level employers would make a point to discuss finances.  It would put countless people in a better position on the road to wealth.

If you liked this, make sure to check out some of my other posts like 12 Easy Ways to Sabotage Your Finances in College or Twenty Reasons You’re Not Rich.

1. Take out more loans than you need

If people are willing to give you money, you should take it!  You’ve got your whole life to pay off loans, so it only makes sense to borrow now.  Don’t worry about how you’re going to make payments after you’ve graduated and are looking for a job.

If you can get loans, you should borrow as much money as you can.  After all, you’re going to college to have fun!  If you’re not eligible for loans, you can always… 

2. Sign up for credit cards without reading the fine print, and use them to party

Colleges wouldn’t allow credit card marketers on campus unless they were a good idea.  If you see one, sign up!  Don’t worry about the fine print – just make sure you get a cool prize for it.  Just like loans, you should sign up for as many as you can!  Sure, opening too many in a short time could hurt your credit, but you’ve got your whole life ahead of you to build it back up.

Once you have credit cards, make sure to use them to finance your partying.  Just because you’re short on cash doesn’t mean you should have to cut back on your lifestyle.

3. Don’t worry about building job experience

Potential employers will only look at the school you attended, your major, and the grades you got.  They don’t care about real-life experience you’ve built through jobs or projects.  After all, no one has experience when they graduate, so it’ll be a level playing field.  The entry level job market is not competitive.

4. Don’t engage in any extra-curricular or unpaid activities

If employers don’t care about the paid work you’ve done, they certainly won’t care about the non-paid experience you have.  It won’t show a sense or purpose or dedication – it will just show that you’re a sucker.  Why else would you work for free?

5. Don’t waste your money in a Roth IRA

You don’t have a real job, and you may not even be old enough to drink yet.  Why do you need to worry about retirement?  There’s no advantage to starting early.  The money is better spent on alcohol or CDs or movies.

6. Don’t attend job fairs and recruiting events

Let’s face it – job fairs and recruiting events are boring, especially if you’re not about to graduate.  Don’t waste your time with these.  Learning about employers and their needs won’t help you, and neither will the networking.

7. Do insist on staying on campus or in dorms, regardless of the cost

Don’t even consider staying at home while in college!  There is plenty of cheap, high quality housing available on campuses.  Sure, you may save a lot by living at home, but you’ll miss out on some great parties.

8. Make sure you don’t attend public or state universities

Private and prestigious schools are the only way to go.  If you don’t attend the best schools, employers won’t even look at your resume.  Expensive colleges always offer a better deal for the money.

9. Don’t bother doing research before choosing a major

When choosing a major, you should only consider what sounds the most appealing to you.  Don’t do any research about what kind of jobs you can expect in that field.  Just make sure your classes are fun!

10. Don’t get involved in any entrepreneurial projects

Most college start ups fail, and there’s nothing to learn from failures.  You’re better off not wasting the time.  It won’t help you network, build business skills, or impress future employers.

11. Don’t worry about your online reputation

Employers will respect your privacy, and won’t do any research about you online during the interview process.  So don’t worry about those embarrassing pics on Facebook…they won’t find them, and even if they do, I bet they’ll appreciate a sense of humor in applicants.

12. Don’t worry about a career until you’re getting ready to graduate

There is no need to start building a career until after you graduate.  After all, that’s when the job search begins.  Don’t worry about a co-op or an internship.  No one does them, and they’ll cut into your summers or the college experience.

These are the warnings I wish I could go back and give myself on the first day of college.  Unfortunately, I made most of these mistakes.  I racked up credit card debt and wasted loan money by staying on campus and partying.  I didn’t have enough job experience when I graduated because I never bothered to look for an internship or co-op.  The fact that I have a well paying job is due more to luck than anything.

I’m happy with my job now, but I wasted my college years financially.  I didn’t start a Roth IRA, which would have allowed me to take advantage of compound interest.  I racked up credit card debt, which forced me to spend two years paying it off when I could have been saving or investing.

With money, time is your biggest ally.  Don’t waste your precious early years for the sake of having fun.