If you're currently drowning in student debt, you may want to take a deep breath before reading this, because this story is sure to raise your blood pressure. One college student reportedly spent $90,000 of tuition money on clothing and a trip to Europe, and is now mad that her parents aren't giving her another $90K to spend on, you know, her education. Her parents' cruel and unusual punishment? They're making her pay it herself by getting one of those things we call a "job." Oh, the horror!
The student, identified only as "Kim," went on Atlanta's The Bert Show to discuss her money woes. She said that her grandparents gave her $90,000 to cover all four years of college (cue the envy), and even though she basically should have been set, she somehow ran out of money and can't pay for her senior year. In retrospect, she said, maybe buying a whole new wardrobe and travelling around Europe weren't the best of ideas. And now I'm adding Kim's grandparents to my list of "people I am really glad I'm not" today, because, I don't even know what I'd do if I were in their situation.
Eventually, Kim came clean to her parents, hoping they'd "loan" her the money. Their response was essentially:
The most rage-inducing part of this whole ordeal is that, instead of admitting, "Yeah, I messed up" and trying to fix it, Kim is still blaming her parents. She told The Bert Show, "Maybe they should have taught me how to budget a little more... They never sat me down and had a serious talk about it." Obviously there's a lot going on with Kim's situation that we don't know — but I can't help but wonder whether it should really take a serious, sit-down talk to explain, "Here's the $90K your grandparents gave you for college, divide that by four and you're all set. Oh yeah, and don't blow it all on a trip to Europe." It's stories like this that are the reason people think the Millennial generation is doomed. This is why we can't have nice things, Kim!
Even though Kim's example is a little extreme — OK, a lot extreme — it does highlight some important issues. For one, that even though we spend so much time in school, it still doesn't teach us a lot of real-world skills like budgeting, and teaching kids about managing finances is pretty much left up to parents. When you also consider the fact that a new study found rich parents don't talk about money with their kids, it kind of doesn't seem as mind-boggling that Millennials could make mistakes like this. I mean, people in their 20s or younger aren't exactly known for sound decision-making or having the ability to think things through, and without any sort of financial education to fall back on, it kind of stands to reason that mistakes would be made. That's not to say Kim isn't responsible for her $90,000 mistake — but maybe it also proves why we shouldn't be so afraid to teach our kids about money.
If you're bad with money, though, don't despair. Clearly, you're not alone (and probably not as bad as this girl). Thanks to a little something called the Internet, you can learn how to be responsible with your money. Here are some tips so you don't end up in a problem of your own making:
1. Try to Make a Budget
It sounds like a no-brainer, but it bears repeating: You need to make a budget so you can figure out how much you're spending and how much you actually have to spend. The nice part is it's a lot easier to make a budget nowadays than when your parents were your age: You can make one in an Excel spreadsheet, download budgeting apps like Mint, or use whatever other method works for you. Once you have that down, don't spend more than you make (seems obvious, but it had to be said).
2. Pay Down Your Debt ASAP
Loans can be a drag. If you did graduate with some loans, Forbes recommends trying to pay it down as quickly as possible by thinking of your loans as a sworn enemy rather than a monthly payment — in other words, you want to get rid of it right away. They recommend trying to add an extra $25 a month to your payment, or setting up automatic payments from your bank account to reduce the interest rate.
3. Set Up an Emergency Fund
This is life, and things happen that will derail your plan. Everybody needs an emergency fund to fall back on so that one little accident (or emergency) doesn't mess up your entire life. Forbes advises setting aside six months to a year's worth of income in a savings account, while Kiplinger says three to six months' worth. Obviously, the more the better, but do whatever's possible for you.
4. Learn How to Cook
This is perhaps more of a money-saving tip, but seriously, learning how to cook will save you sooooo much money in the long run. For me, my weakness was going to brunch every weekend, where I'd spent anywhere from $12 to $15 on some type of egg dish with grits. It doesn't seem that bad, until you consider that a carton of eggs costs under $2 and a box of grits is like, $3, and that will last me at least a week (unlike that meal from that brunch place).
5. It's Never Too Early to Start Saving for Retirement
Sad, but true. I myself have been skeptical of this notion — I don't even have a career yet, so how can I start thinking about retiring from it? But if you think about the fact that if you retire at 65 and live until 85, that's a full two decades we're talking about. If your employer offers a 401K, you've basically hit the jackpot and should take advantage of it to the fullest.