Money! Let’s talk about it and the 3 big money lessons I learned the hard way during my college and university years. Thinking about it now, I wish I had been taught these lessons back in high school, at college or better yet at home. Most of us left college/university pretty illiterate when it comes to finances especially how we manage our money (spending, saving and investing). There are so many things I have had to learn from experience and others would have been better if I had taken a financial course at school.
Until I had found myself in financial peril did I wish I had learned about it beforehand. Throughout high school, college and university I was quite happily floating about without a care in the world. Looking back, I wish I had spoken to my parents about my money troubles in college and in university but money isn’t a ‘nice topic’ to talk about so I didn’t and mostly because I was ashamed and didn’t know how to explain to them how I got into this financial mess.
*Disclosure: This is a collaborative post asterisked (*) links are collaborative but all opinions shared are my own.
3 Big Money Lessons I Learned the Hard Way
When I was younger, I was bad with money, you see I was a spender and saving money wasn’t something I thought much about. I wish it didn’t happen but in this post, I am sharing 3 big-money lessons I learned the hard way in my younger years. Not everyone talks about money, everyone is very private about their personal finances and personally, I feel sometimes this is a bad idea especially for those struggling and needing advice and those with all the tips and tricks but won’t share a nickel of that knowledge.
In this post on the 3 big-money lessons I learned the hard way, I give an honest account of my personal money struggles and give a few tips on how you can make sure you avoid them or if you are already in there, I share some of my lessons learned and how you can change your situation as I did many moons ago. I finished university with no student loans (I worked and my parents worked harder to make sure we made enough money for my schooling) but I somehow still left university with over £11K in credit card and payday loans.
Big Money Lessons on Credit Cards
I remember this lesson like it was yesterday, when I was still doing my sixth form, I just turned 18yo when I got the taste of my first credit card with a company called Vanquis. This credit card offered me a £500 credit limit and promised me that within 6-months it would be increased to £1000, the catch was it had high-interest rates but obviously I was too young and naive to understand what this meant for me in the long run. This card wasn’t like your typical student credit card but they still gave it to me even though I did not work.
Today, alarm bells would be ringing but back then, I didn’t think too much into it – I viewed it as free money that I can pay back later. At first, I was scared to spending this money but once I did, it became easier and then I got a job and I was encouraged to not worry too much about repaying the whole balance back – just pay the minimum amount – what’s £12.30 on £500? I was truly sucked in and didn’t think much of it until I realised it was a never-ending cycle – I paid the minimum and 90% of that went to paying off the interest charges so, in essence, I was paying back 2.5% minus the interest.
Lesson Learned
Don’t get a credit card in college and even at university if you have poor money management skills, wait until you have educated yourself enough on managing your personal finances and then get one. I struggled with my first credit card for many years, I wasn’t earning enough to pay it off at once and I missed a number of payments which affected my credit score in the early days. What is interesting is that the credit card company continued to increase my credit limit (not knowing I could opt-out) and I sunk into more debt. DON’T DO IT.
Big Job Lessons on Unemployment
One thing I wish someone had talked to me about big time as I left home to live independently and I entered the workforce is *income protection insurance. This would have helped me during the time of unemployment and to this day I still don’t understand why this kind of insurance is not frequently discussed. I guess we are all under the notion that if you lost your job today, you can easily find something especially for skilled workers but we know that’s not always the case.
When I finished university, I was fortunate to get a job in my field pretty quickly but after a mere 8-months I was let go (still old a grudge lol) and I was devastated. My final pay from that job wasn’t going to cover much of my expenses and I had zero savings nor an emergency fund. I ended up moving back home with my parents as I searched for a new job and thankfully I found one within a month. This is not always the case for many people, as most struggle for months on end and with the current job climate, the competition for new jobs is even tougher and most employers are not hiring.
Lesson Learned
Get income protection insurance as you never know what the future holds and since I am also a homeowner, I have several other insurances that will protect me if the worst should happen. I recommend that people save (this is what I have done) up to 6-months worth of their monthly salary for emergencies and unexpected bills.
Big Money Lessons on PayDay Loans
After many years of struggling with credit card debt, I thought maybe a payday loan would help me get out of the mess I had gotten myself into. Please excuse my foolish younger version of me but I thought it would help instead all I did was trade one type of debt for another. The types of payday loans I got myself into required that you pay off the full amount at your next payday without fail. I had borrowed more than I had readily available to spend once my essentials bills were paid.
As you can imagine, this led to some bills bouncing because I had to repay the payday loan debt I had borrowed in full meaning I had to borrow more to pay my bounced bills. This because a theme, I would pay off on my payday and the next day I would go back and borrow ‘the same amount’ (yes I hear you, I never learned). And what was worse was that you could borrow from more than one payday loan lender, meaning you could easily incur more debt with your eyes widely open. I continued on this vicious cycle for half a year before I said enough was enough.
Lesson Learned
In order to ensure I stopped the payday loan cycle, I decided to default on them, I called the companies and arranged for a fixed repayment plan. This required a lot of financial trackers showing all my expenditures, how much money I earned and what I could afford to pay back. This isn’t a place I would want anyone to be, its a nightmare but if you are in this situation, I would recommend writing down your budget and once your necessities are paid, split the remainder into small amounts for each debt you owe. Check with the lenders and tell them how much you can afford to pay them monthly and you will pay it off even if it takes you years.
What are some of the money lessons you learned the hard way and wish your children never have to experience? Looking back now, I wish I had the courage to tell my parents about my debt but I figured I was an adult and should solve my own problems. If you find yourself in the same situation, talk to your guardians, friends and seek financial help.
inmyprime50 says
Credit card companies prey on college students, sending them great offers and then the poor students can’t pay back the card.
Miranda says
Oh my gosh yes, I definitely felt preyed on looking back. I didn’t have a job I had no business owning a card I couldn’t pay back.
Monidipa Dutta says
Well, I am too learning this debt thing the hard way. My ex left me bankrupt and with lot of debts so I now know how it is like!
Miranda says
Oh dear God, I feel for you and hope slowly but surely you will come out of top of this.
Kara Guppy says
I had my first child at 18, and being a first time mum I wanted the best of everything, but I couldn’t afford it. It took me years to pay off all the debt I wracked and my credit rating still isn’t where I want it to be
Miranda says
Aww bless you, at 18 is tough enough but being a mum too must have been tough wanting to give your child everything.
marjiemare says
I wish I have read your post years ago, I have learned my lesson the hardest way too.
Blair Villanueva says
We learned so many lessons the hard way and that’s okay as long as we do remember them and carry those lessons as we move forward. I got my first credit card when I landed my first job and applied for the lowest credit card available. It’s been more than 15-years and that same credit cards gave me a lot of opportunities and still have it.
Miranda says
I agree I am glad I heard from my hard lessons and went down you for keeping your credit card for that long.
Kelli A says
These are definitely some hard lessons to learn. I have never had a credit card in my life after watching my mother max them out while we were growing up. I refuse to get one of any kind.
Miranda says
I think that was a lesson in its on way and good on you.
Lisa says
You’re so right about getting a credit card in college. I made the same mistake and ended up paying for it! Lesson learned!
Joanna says
People should go through a test before being allowed to apply for a credit card. Honestly, they are the biggest creators of debt. I thought I had it all under control but still fell in the illusion of the credit cards. Now I’m about to finally pay of my last one and only keep them as an emergency fund.
Miranda says
I think more than just a test but more to ensure people don’t get sucked into the idea of ‘free money’ like I was
Ivan Jose says
Financial intelligence is really important. Thank you for these lessons.
rhianwestbury says
I do agree that we should learn more about money and credit and finances at school to prepare us, because some of us didn’t grow up with parents who spoke about it much. I’m glad you’ve learnt from your experiences though x
Miranda says
Thank you and yes, the school should also teach us money management and building good credit.
Cristina Ioana says
This is great advice! I think financial education should be mandatory in all schools, thus young people could avoid learning these lessons the hard way.
Miranda says
It really should be, there is so much we weren’t equipped with when we left school
successunscrambled says
One of the first things that should be thought at secondary level and again in college is personal financial management, it will not only help every individual but the community, credit unions and also the government because they would be no need to bail out the banks.
Miranda says
Right! I couldn’t agree more, it’s like no one teaches us about money but expect people to be smart about it.
Bacolod Blogger Sigrid says
About credit cards, we love having them because they are like emergency fund. We pay off credit during the due date and don;’t do installments unless 0% is offered by the bank.
Miranda says
I like that, I think such control is good to have but unfortunately, not many of us practice this.
Lyosha Varezhkina says
it is a great advise and yes learning it the hard way may not be that good for you. thanks for posting this
Passion Piece says
Fortunately, I didn’t have to learn anything the hard way. However, I was once unemployed and it was quite depressing for me. Great read! 🙂
Leanne Wong says
It’s really important to learn financial management early and start good habits. Thank you for this useful article!
Wanda Lopez says
Great post. Thank you for sharing this post with us. There are some financial lessons we learn the hard way. The most important thing is to learn more them.
Adriana says
All these are so important learnings. Credit cards are dangerous. Debt can consume anybody’s peace.
Nishtha says
Thank you for sharing your lessons. Not a good idea to get a credit card in college. Trying to raise some Gina up awareness in our kids
MELANIE EDJOURIAN says
It’s good to learn these things as early as possible. Payday loans are never a good idea.
Jenny Kearney says
I would love my kids to take an interest in money, it will definitely help them as they get older and need to manage their own money.
Amber Myers says
You learned some important lessons here. Money can be tricky, that’s for sure. I try to only use the credit card when I know I can pay it off the following month.
Miranda says
This is my new motto, only if I can afford to pay it off in full do I use it otherwise, I don’t need it.
clairelomax2018 says
I to fell in to the credit card cycle at around the same
Age! And store cards! Absolute nightmare and so hard to get out of.
This is great advice!
Miranda says
Oh yes, blooming store cards, I had those as well and it was such a nightmare.
Cristina Petrini says
For “force majeure” I too have understood many things about money and how it is managed. In short, it is important to enter into this perspective and create and manage your own functional budget.