I thought writing about these could be helpful to young people who are just starting their financial journey, so here we go.
- Not knowing were my money went. When I was in college and my first working years after college, I didn’t track my spending. I just went with the flow and honestly, if my money was gone, I just ate crackers. I wasn’t in debt, I wasn’t per se over spending. But I wasn’t responsible with my money either. I didn’t know what my bank account set up cost me yearly. I didn’t save or have a savings account to automate my savings and get money in that account at the start of the month, and I certainly did not have an emergency fund. Which led me to live a very stressful life at times and eating crackers on the regular. Make a budget before you get paid, and assign every euro. And pay yourself first.
- I didn’t have a credit card. I’m glad I didn’t at the time, because the chances are that I wouldn’t have used it responsibly. And although in Belgium we don’t work with credit scores per se, credit cards can be used as a smart tool to save, when used correctly. There are plenty of credit cards where you can collect airmiles, get cash back or / and get premium insurance on the stuff you bought with that card.
- Not doing me. When I first went to college and got set up in a dorm, I really did not care at all about clothes and make up. But, my next door neighbour was a very pretty popular girl that all the boys liked. She had a lot of money to spend that she got from her parents. She dressed in another outfit 4 times a day or to go to different classes. You can guessed what happened. I wanted to be her friend, I wanted to be like her, I wanted to be in het social circle. and eventually I started spending on clothes and make up to keep up with her, without having the money per se. Luckily I was in college at a time where social media was almost non-existent. Facebook just started out, but that was it. There was no instagram to compare myself with. I feel kind of lucky to have gone through puberty and my twenties without all of that. So the moral of this story is, just do you. Look at your financial situation and your goals, and don’t compare yourself to others. After all, there is only one you.
- Spending my money on clothes. In my teens and twenties I already bought a lot of vintage, but it was no where near as cheap as you can find it now, because there are so much sellers around and thus more competition. At the time when I started, there were maybe one or two vintage stores and a thrift store in the city where I went to college. Second hand clothing wasn’t popular, It was more for the alternative people. Which were also the people I hang out with. I studied social work and my social circle at school were mainly very alternative people with a different vision on consumer society. There were people squatting houses and going for dumpster diving to set up community food or a community kitchen where people could eat for free. But when I got more into the group of my dorm neighbour, and at that time I also met a small circle of girls that were in fashion school, everything changed. As I mentioned, I started to buy more cheap fast fashion because that was the only thing my budget allowed. Every time I went out, which at the time was almost 4 to 5 nights a week, I had to wear another outfit. The result of that was not only being broke, all the time, but also going to the night shop before going to the club, to save money on drinks. Which is kinda sad if you think of it. A bunch of pretty girls in clubs that have no money to spend on a drink. My advice is to set money aside in your budget for classic pieces, try to build a more minimalist closet with pieces you can wear in many different ways and that are from good quality so they’ll last a longer time.
- Moving out too soon. Because of my parents moving to another town that was on the complete other side of where I used to live, while I was in college, there was no possibility to stay at home while I was working my first year and save up some money. I just got my first job, my first apartment I rented, on my own. You can guess what happened. At the end of each month, my money was gone. I suggest you live with your parents for as long as you possibly can to get yourself some financial stability. If you can’t, get at least one roommate to split the costs. Living by yourself in Belgium, near a bigger city is extremely pricey if you want to have some comfort and live by yourself. If I could go back, I would definitely look in to more alternative ways of housing.
- Cars. I see people suggest all the time to not spend your money on new cars because it is just a bad investment and the devaluation of a car is just enormous. I have a slightly different opinion on this. I love new cars, and here is why. Through my twenties and a big part of my thirties I followed that advice of buying second hand cars that were 5 to 6 years old. I can’t tell you how much money they have cost me all together, and stress. I have had some real bad luck with cars, going from having accidents that weren’t my fault but getting little money back from the insurance, to buying a car that had major costs, I’m talking 1200 to 1500 euro’s, not to speak of all the maintenance, repairs etc etc. What I suggest is that you save up as much as you can, put down a bigger deposit, thus pay off a bit less, and go for a car that is within your budget. I think the mistake people make is not so much buying a new car with warranty and all the good perks. But buying a new car of dream car that is just not in their budget. For less than 10.000 euro’s you can get a nice new car that does the job. For the 4000 that you would have put down on a 5 year old car you can put that towards the deposit, and you’ll have a new car with warranty that gets you everywhere you want to go, without the huge unforeseen costs. Big unforeseen costs are one thing, but if you then make a decision to have the car fixed and It breaks again beyond repair a month later, that is a real tragedy. Happened to yours truly more than once. I’m not changing my opinion, I love NEW cars.
- Buying a house before you’re ready. When I bought my first house, I was 27, and to be honest, I was no where near ready for the financial responsibility and everything that comes with buying a house. I succumbed to the pressure of my parents, my friends, that were also buying houses and starting a family. After living in the house I bought for one year, I felt that I didn’t like the city ore area I was living in that much. It was near the beach and more affordable than the area near Brussels I live in now, but super far from my job. I was just tired all the time from the commute. There weren’t a lot of times that I actually enjoyed the beach. Don’t succumb to the pressure to buying a house. It is a very big decision. Again, just do you. Everyone has their own timeline and situation that they are in. There are factors you’ll never know, or even your friends won’t tell you about. For instance, how much their parents sponsored them. Or how much their spouse really earns, or how big their downpayment is. Social media especially shows only the surface, maybe people went on vacation and came back without a euro to their name, or they might have took out a loan for their vacation. There is no real way to know, so it makes really no sense to compare yourself to anyone.