This is a guest post from Josh, who is a college student, startup founder, and weekend warrior. Check out his blog, Entrepreneur Stories.
“Live like no one else now, so that later you can live like no one else.” – Dave Ramsey. Follow that advice and when it comes time for your 20 year school reunion, you’ll be the one all your friends are jealous of.
At a young age your money is worth a lot more than when you’re old because of how long it can work for you; invest it wisely and it will grow rapidly, squander it on frivolous things and you’ll end up barely scraping by your whole life.
Spending money on stupid things only leads to trouble…here are five things you should never spend money on while in college if you want a financially lucrative life.
Let me tell you a short story. There was a high school student who started a lucrative company. He then bought a Mercedes, and a BMW, and then a Jaguar – by 19 this guy had owned a whole fleet of luxury cars (and spent a boatload of money doing it). In college that business was no longer a viable option and this guy walked away from it.
Sad part is there was very little savings leftover despite the fat paycheck he’d been receiving for years. That guy was me, and I can tell you straightaway, having a fancy car is not as “cool” or fun as you’d think, it’s mostly just a waste of money. If you want to live a comfortable life, don’t throw money at cars while your still a teenager.
2. Fancy Clothes
Have you seen Mark Zuckerberg lately? He looks like a jogger with bad taste. despite what the salesman at Macy’s is feeding you, silk and leather are not needed to land a job. That’s doesn’t mean you should show up dressing like Mark in a hoodie and jeans, but a clean $90 outfit from Khol’s is all you need – don’t go out and drop a grand on a fancy suit.
Don’t believe me?
I once attended an interview that was suits only (Toyota keeping things classy). Upon arriving in a pair of slacks and a jacket that didn’t quite match I was an intimidated by the other candidates who were wearing the finest suits money can buy. However, as soon as my interview started, the clothing ceased to matter and I had a great conversation with the interviewers.
I got the job. My “suit” cost $50, I’ll wager some of my competitors clothing put them back over $1000. Despite what you may think or advertising may tell you, fancy clothes are not necessary for getting jobs and should be avoided until you can truly afford them.
3. Watches: They are a Great Conversation Piece but a Terrible Investment
Here are two examples:
- A casual meeting with myself, my co-founder, and two clients. We sat down to lunch and began conversing. The subject of watches came up and we chatted for a few minutes about our favorites, the heritage, and the Pebble (that thing is so cool).
- I was deeply involved in the hiring process at a former place of employment (I’m not allowed to say where). I’m not lying when I tell you that one young man was actually rejected because his watch looked much to pretentious. To be honest, it wasn’t just the watch, but the watch was the kicker and actually prevented that poor guy from getting a job.
A watch can be a timeless piece (pun intended), but it won’t do you much good, especially when you could be spending your money on much better things like tuition.
4. Eating Out
The biggest issue with eating out is that you won’t even realize how much money you’re spending on it until it’s to late. Ten dollars here and there adds up fast, and unless this money is budgeted it can ruin you.
When I was running my first business it was normal to have meetings at restaurants and visit food establishments three or more times a day. The bills would skyrocket up to hundreds a month. If I’d caught myself and mitigated that cost, I could have used that money to fund an entire year’s tuition!
The truth is you don’t need the latest ipad, ipod, iphone, and ihome. Electronics depreciate by 50% in their first two years, and buying new versions all the time is literally throwing your money away. Laptops and phones are built to last, so use them for their intended purpose!
It’s much to easy and “normal” for college students to blow money on frivolities. This leads to a small savings account and years of living paycheck to paycheck; but you don’t need to take that path. The solution is simple, don’t buy useless stuff and expect it to pay off. “Live like no one else in college, and at your reunion you’ll be living much more comfortably than your classmates.”