By Vicki, from Women Who Money
I was lucky enough to land the first job I interviewed for after graduating from college. A month after my 22nd birthday, I packed up the apartment I shared with my college roommate and started hunting for an apartment in a new city.
While I was excited beyond belief, I’ll admit – I was a little terrified too.
The number of decisions I had to make in just a few weeks was overwhelming. And many of them could have really set me back financially.
While I’d have a “real” income coming in soon, I was a first-year teacher. It wasn’t exactly a “big” salary.
- Where would I live?
- Would I make enough to pay my bills?
- What health insurance should I choose?
- How much should I put into a 403b?
I guess you’d call it #adulting now – but when I was 22, hashtags weren’t a thing.
While you might just google the answers to those questions today, the internet was pretty new when I got my first job. Can’t imagine life without Google and a cell phone? (I can’t either now – but believe it or not, there were some real benefits to not being “connected” 24/7!)
I had to use a newspaper to find an apartment. There were no “find a roommate” or “meetup” apps.
The only information I could find about health insurance and retirement accounts was the paper booklets human resources gave me. You guessed it. #notveryhelpful
Now that my own kids are in college, I’m in the position of helping them answer many of these same questions. While I know they go to their phones to get information, they still ask my advice once and a while 😉
As someone who believes that financial independence should be a goal for everyone (first from your parents/family, and then from your employer), I took some time to consider what I did when I got my first job that helped me start my path to “FI”.
While none of these are a big deal alone, the combination of choices helped me build an emergency fund, invest in a retirement plan, and buy a starter home. And then purchase my first rental property (a foreclosure) the month I turned 26.
8 Things I did Right Out of College to Start Down the Path to Financial Independence
1. Rented a studio apartment. I picked the cheapest apartment I could find in the nicest neighborhood in the city. I didn’t have much to put in an apartment, and I knew I wouldn’t be home much because I’d be incredibly busy with work.
A big place and the rent to go with it wasn’t practical for me. Nor was buying a bunch of furniture I would hardly use and paying higher utilities than I needed to.
I’d lived in a dorm room and a small apartment with roommates for four years. Having a place to myself was priceless!
Money Tip #1: Always try to negotiate the rent too! While the answer may be “no” – an extra $10 or $20 (or more!) a month in your pocket adds up over the term of your lease.
2. Focused on my job. Of course, you focus on your job when you first get hired – right? But I really focused on my job. It was my dream job in a wonderful district and I was going to do everything I could to keep it!
I sat in on classes of veteran teachers to see how they managed their classrooms and answered student’s questions. I stayed late many days to prepare for the next day. It was incredibly hard, but it made a massive difference in my confidence and success.
Money Tip #2: As a science major, I could have chosen profit over passion. But I didn’t. The best way to grow my bank account in a field with lower pay was to keep my job and focus on what I could control.
3. Side hustled when I could. I was hired to coach, in addition to being a science teacher. So I was hired to “hustle” in addition to working full-time.
During the summer, I also worked at a busy lakeside restaurant. It wasn’t all work and no play though. I enjoyed my summer days! But working just a few nights a week allowed me to bank extra money – rather than hit the mall and spend it instead.
Money Tip #3: While it’s important to build in downtime to take care of yourself, working a side gig a few extra hours each week can help you pay down debt or provide the cash for your vacation sinking fund.
4. Drove an older car. It would have been easy to justify going out and buying a new car when I landed my first job. After all, I didn’t want to be late for school because my car broke down.
Luckily, I was so busy preparing for school, finding a place to live, and getting familiar with my new city that I didn’t take time to test drive new cars. My old car held up fine for 3 years and I didn’t have to take on another payment.
Money Tip #4: Paying for repairs and routine maintenance on your car may seem pricey, but you might regret taking on car payments that last for years. (And keep in mind you’ll still need to pay for maintenance – and maybe even repairs – on a newer car too!)
5. Kept on learning. Our district offered professional development days in the summer, and I took advantage of them. We also got paid a small stipend for those days, so it was a double win for me!
Money Tip #5: Make sure you understand all of the benefits offered by your employer. Take advantage of opportunities to grow – and make more money – whenever you can!
6. Built relationships in my new community. I volunteered at different functions at school and in my new city. Parents and other community members got to know me, and while it was great to make new friends, it also helped me earn more money.
People hired me to tutor their kids and I was tapped to direct a new grant-funded summer camp. My visibility and willingness to help others “opened doors” to new opportunities.
Money Tip #6: Changing my mindset from focusing just on my needs to the needs of others was good for me in so many ways! I felt good about helping and even though I had no intention of it “paying me back” – it certainly did.
7. Focused on needs not wants. As the paychecks rolled in, I could have started to splurge on plenty of wants – and not just needs. But I didn’t have room in my small apartment for a lot of extras.
Plus, I was too busy to go shopping when it wasn’t really necessary. Remember there was no Amazon Prime or any other online shopping when I started working.
I also didn’t compare myself to others on social media, get targeted online ads, or have one-click ordering to help part me from my money. It’s definitely more challenging today!
Money Tip #7: To build good money habits, have clear short- and long-term financial goals. Also, consider the money behaviors that are stopping you from saving.
Are you an emotional spender? Take apps off your phone that allow you to spend money quickly. And if you haven’t used a budget or track expenses yet, that’s a great place to start your path to FI.
8. Made my health a priority. I was an athlete in college but I certainly wouldn’t say I was focused on wellness those four years. Beer and late-night pizza took priority over healthy eating many days!
But when you have to be up in front of 24 high school students at 7:30 a.m. to teach, you have to be at your best. I made sure I packed a healthy lunch every day and I used the workout room at school to try to stay physically (and mentally) fit.
Money Tip #8: Bringing some snacks and lunch to work every day was a healthier choice for my body and my bank account.
When you have a 30 minute lunch period often interrupted by meetings or by helping students, you don’t have time to go out for lunch or deal with ordering something in. And using the school fitness facilities before students arrived saved me from paying for a gym membership too!
While it might sound like I did everything “right” and didn’t make any mistakes out of college, that couldn’t be further from the truth. I made plenty of them!
But the smart choices I did make outweighed many of my bad decisions.
No matter where you are with your money, making small changes can definitely pay off. And the more changes you make, the bigger the payoff will be!