Updated on 11.14.06

If I Could Do It All Over Again: Advising Myself At Age Eighteen

Trent Hamm

Ten years ago, I was in the midst of my freshman year in college. I had very little concept of money or what to do with it, but at that point I still had an overall positive net worth. If only I knew then what I know now, I sometimes think to myself, particularly when I look at the financial disaster of the last ten years.

So what would I tell myself if I had that chance? Here are the ten pieces of advice I’d love to tell that college freshman:

The less stuff you buy when you’re in college, the better off you are. Why do I say this? In general, my decision making in terms of what items to buy when I was in college was at best poor and at worst disastrous. I would buy things like furry hats and tee shirts with pictures of gophers on them. Why? I didn’t actually know then, and I certainly don’t know now. In general, I would have just encouraged myself to think more about each thing you buy and simply ask myself if I really needed it. If I didn’t, just put that money in a savings account somewhere rather than buying a giant poster of Hulk Hogan.

Live in the dorms for as long as possible, especially if you’re on scholarship. If your tuition, room, and board are free, as they were for me for a few years because of ample scholarships, you are a fool if you move off campus. Not only are the costs of food and housing going to greatly increase, but you’ve suddenly added transportation costs to the mix, along with the extra travel time you’ve added to each and every day.

Get a credit card, but only use it to buy textbooks. The reason for this is to build credit in a healthy fashion but avoid the temptation of using a credit card, as in the plan described here. I got a few credit cards during my college years and I made very stupid purchasing decisions with them; even though I kept the bills paid, I swallowed a lot of finance charges. I’d love even now just to have the cash I dumped into finance charges if it had been left in a good savings account for five or ten years.

If you get student loans, minimize the amount of the loan. I had to get loans for my final two years in college. At that point, the loans allowed me to borrow about six thousand beyond the cost of room and board, so I took that to essentially mean a low interest credit card, and I borrowed the maximum possible. It was a big mistake that I’m still paying for. Get what you need for room, board, and enough for textbooks and keep living in the dormitory. That way, there’s no temptation to spend that loan money on stupid things.

Assuming your dorm life is covered, put at least half of any pay you receive into a high-yield savings or money market account. Living is cheap now, but when you graduate you’re soon going to have a ton of expenses rain down on your head. You’ll need a good car, you’ll have a wedding and honeymoon to pay for, a child to care for, and a house to buy. Help that future self out a little now. If you’re adventurous and actually have some financial grounding, you can invest it, but don’t invest too much in it.

Never, ever buy an article of clothing that costs more than half of the last paycheck you received. If you’re buying such expensive clothes, it is a red siren that you’re heading down a road laden with debt that you’ll be digging yourself out of for many, many years. You’re in college; you’re probably going to buy some unnecessary stuff. But do you really need a $300 pair of jeans or a $500 sport jacket when you can get virtually the same item for much less money? Is it worth mortgaging your future for?

Find cheaper ways to maintain your hobbies. In college, my biggest hobbies were reading, writing, listening to music, going to movies, and playing Hearts. In almost every case, I spent wildly on these hobbies, but just a few changes would have saved me a lot of money that I could have put away for the future or perhaps not borrowed as much on my student loans. Instead of buying two new books every week, I could have gone to the local library. Instead of buying exquisite leather-bound journals, I could have just bought a cheap notebook. Instead of buying three CDs a week, I could have listened to student radio (it was playing almost exactly the same stuff I was buying – and it was free). Instead of going out to a movie every weekend, I could have watched some of my DVDs or borrowed some or went to one of the free movies on campus. Instead of playing nickel-a-point Hearts, I … well, there’s not a good replacement for that one, but by the end of my final year, I was actually making good pocket money at it. In short, my hobbies ate up a lot of my money in school – a giant mistake.

If I had followed these eight guidelines in college, I would be debt free right now and have a house down payment; instead, I have only a bit saved towards a down payment, I have tens of thousands in student loan debt, and I just now paid off all of my credit cards.  Was that furry hat really worth all of this?

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  1. I’d recommend starting a web company out of your dorm room and selling it to a big corporation for millions.

  2. Sorry, couldn’t resist. Seriously, what I’d recommend is finding a financial mentor. Someone to keep you honest about money, remind you why we should do the things listed above, and to take your finance questions to.

  3. lorax says:

    I think these are good rules of thumb, but this one was not true for me:

    > Live in the dorms for as long as possible

    First, the dorms were a party house compared with off-campus apartments. Second, it cost more for me to live in the dorms vs a shared apartment. Third, I got exercise walking to school. (There was sometimes the slight matter of having to avoid getting mugged, but that was true on-campus too.)

    Anyway, a cost-benefit analysis is needed.

  4. SavingDiva says:

    Great post! I wish I would have taken your advice when I was in college. I escaped without loans, but I did have credit card debt and NO savings. This should be posted in every freshman dorm around the country.

  5. Mike says:

    Trent, your advice is appreciated but never, EVER regret the the decision to buy a giant poster of Hulk Hogan. Some things are more important than money. :)

  6. LC says:

    Another thing to consider about the dorms are most require you to buy the college’s meal plan for 15-20 meals a week, which are overcharged to begin with but even more so when you skip breakfast, go out to eat, etc. So if your room and board are not part of your scholarship (which I think was the reason Trent mentioned that), consider all costs (housing, utilities, food, etc) and compare. If they are similar, go with the most convenient/desirable for you.

  7. Danielle says:

    Okay… this post is old. But I just had to add…

    I completely support the idea of never paying more than half your last paycheck for an item of clothing. My wedding dress didn’t even cost $300… why on earth would I need jeans or a jacket that did?

  8. Andrew says:

    I disagree with the living off-campus bit. In my college town, there are expensive luxury apartments for richer students right by all the bars/nightlife, but the vast majority of off-campus apartments end up being cheaper than the dorms ($1000-2000 cheaper if you live with 2-5 other friends). And of course, you’re still in school, so unless you have horrendous social skills you can save money by getting an apartment with these friends.

    As for transportation, my college is on a hill, and there is considerable off-campus housing that is still on this hill-walking to class from most apartments is actually a shorter walk from where the inconveniently located freshman dorms are.

    Many fraternity houses are considerably cheaper than dorm living, but this also depends on how much you pay in dues. Some fraternities have bad recruitment years and sublet rooms to random students so they can pay their overhead during the school year. Yeah, yeah, there are all sorts of stigmas about fraternities, but they’re not all Animal Houses, and a friend of mine is living in one for around $450 a month, utilities included, plus he doesn’t pay dues because he is not a brother in the house.

    Depends on the campus though. I personally would not recommend living in a dorm past sophomore year (unless your school offers special upperclassmen apartment-style dorms). Sure, it’s great that the bathrooms are cleaned for you in dorms, but there are those tedious RAs, and you can oftentimes find quieter, larger, and at the same time cheaper places to live.

  9. Andrew says:

    And also, might I add about subletting a room in a fraternity:

    It is an excellent, excellent option. My aforementioned friend actually did it. It’s actually one of the “lamer” houses where there’s little drinking or parties, and they had a tough recruitment season, and less income from people living in the house. The housing contracts are for the SEMESTER. Which is excellent because EVERY APARTMENT LEASE YOU WILL FIND is by the year, not by the semester, meaning that if you want your money’s worth you have to get subletters or live in your apartment over the summer. Not always a viable option, but definitely something to consider

  10. Andrew says:

    And meal plans are expensive, which you must have to live on campus. The cheapest one is about 10 meals per week, over $2000 per semester. The meals “reset” at the end of the week, so if you don’t use all 10 in one week, they do NOT “rollover,” they are lost forever. And when you eat a more convenient lunch off campus or go out to eat and miss a meal, the price is actually the $5 sandwich you bought PLUS the ~$20 per meal that you skipped

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