Smart About Money: “No one told me that” – Life & Money After High School

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Anyone graduating from high school in 2020 has had a unique opportunity to see first-hand and very young how life actually works.

In life, there are many things to look forward to.

There are also many things that no one looks forward to – losses of all kinds, including for many of this year’s graduates the loss of their last semester at high school and the loss of the chance to celebrate graduating with their classmates.

And then there are things no one ever imagined would happen. The Coronavirus shutting down the world economy obviously falls into that category.

In every situation – normal or completely unexpected – it is everyone’s responsibility to look for ways to come through as positively as possible and to look for ways to help others get through too. Sometimes that will seem difficult or even unattainable. But you and the world will be better for your making the effort.

Here is some financial advice that works in “normal” times (which is most times) and in the difficult and troubling times too:

There’s a reason why financial advisors urge everyone to have an emergency fund of 6-12 months’ income (or more!) – ideally not in the stock market.
Many young people have just had their first experience of getting laid off. But with or without the Coronavirus, losing a job is not uncommon. Having a solid emergency fund means you have something to depend on while you figure out what’s next.

If you’re going to college, make sure you personally have a good understanding of how much it all costs, where the money is coming from and – most important – who’s responsible for paying it back.
It’s easy for families and students to lose track and then be badly surprised at the crippling amount they owe. Know for sure what you’re agreeing to because you will be expected to pay those loans back when you leave school – whether that’s at graduation or earlier. Also, make every effort to use your years at college so that you get a return on your significant investment of time and money. That will make it a lot easier for your future self to pay those loans back.

Open and read any snail mail that comes to you from college loan lenders or other creditors.
If you don’t understand what you’re seeing, get someone to explain it to you. Don’t just ignore it. Missing only a couple of payments can hurt your credit score badly, just when you may be hoping to buy a car or rent an apartment. Critical correspondence is often not emailed and it’s probably not being sent to your parents either. “No one told me that” won’t cut it when you have been notified by mail.

Stay far away from “easy credit”
The theme song for the ‘70s TV show “Good Times” warned against “easy credit ripoffs.” Easy credit is all too easy to get and often almost impossible to get away from. If you can’t afford something now, it will only cost a lot more later if you buy it with easy credit. The easier the credit, usually the worse the deal is for you.

Some trouble can’t be avoided. The Coronavirus basically defines that category. But a lot of trouble can be avoided or greatly minimized. In good times and not-so-good times, actually doing do-able things like these will make your life much more pleasant. That’s the goal. The best time to start getting into good habits that will serve you for the rest of your life? Today.

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