7 Personal Finance Tips | Molly's Money

If this is your first time here, Molly’s Money is a regular series I write on this blog that includes ALL things personal finance – debt management, budgeting, home buying, savings, investment, etc. I am NOT a financial advisor, but I am married to one! These are just things that I have learned over the years as I struggled with my own personal finances and ultimately, became debt free in 2012.

Today’s post comes as inspiration from a reader email question I got this week! It comes from “M” who is going to be 17 this summer and wanted some advice on stuff she should do to prepare for her financial future… Here’s what she said…

Hello Molly,

I loved your article about tips on how to be financially responsible! I am going to 17 in July [and] I’m wondering if everything on [your] website applied to me. […] thanks!

Sincerely, M

Hey M!

First, thank you *so* much for your email! The fact that you are even thinking about money and thinking about your financial future at the age of 16, almost 17, is truly amazing!! You are in a much better place than a lot of kids your age. Really! When I was thinking about what to write back to you, I was thinking about what I wish I would have known about money and personal finance at your age.

So, with that in mind, I have 7 money and personal finance tips for you that I wish I would have known at 17!

Here they are…

1. Learn how to budget

This could not be more important. I honestly don’t even know how to emphasize this enough. Budgeting is such a basic foundation of being financially responsible and it’s something that I didn’t really learn how to do until I was well into my late 20s. I have a whole post on budgeting that you can read here!

2. Credit Cards

Don’t even get one. Don’t even think about it. When that table in the breezeway of your college or mall or wherever is set up with cool t-shirts and free swag in exchange for a credit card, IGNORE THEM. RUN FAR AWAY. Just don’t even play. You don’t need a credit card (yet, if ever), so don’t even entertain it. I really, really, really wish I’d know this at 17.

3. Saving

Start saving at 17. Make money. And save it. Take that birthday check from your grandparents and save it. Open a savings account, put money into it. Just. Start. Saving. I was not a good saver in my teens and early 20s and I paid for it, literally, later on. I’m a good saver now, but only because I learned the hard way. My husband, on the other hand, was a great saver as a kid and young adult and was able to put a 20% down payment on his first house at the age of 24 because he was such a great saver. Learn from him.

4. Don’t worry about saving for retirement just yet

Speaking of saving, don’t worry about saving for retirement just yet. You’re not going to have a 401(k) at this age or need to worry about a ROTH IRA or even mutual funds. Just get into the habit of saving, in general, right now. BUT… have saving for retirement on your radar to start thinking about once you get into your 20s and/or into the workforce and starting a career. I have a whole blog post on saving for retirement in your 20s that is helpful! Bookmark it for later. 🙂

5. Don’t buy silly stuff

This means what you think it means… don’t buy stuff that really isn’t important. Don’t buy clothes you don’t need or toys you won’t use for longer than a month or the lipgloss at the checkout counter. Think before you buy. Ask yourself the question, “Do I really need this or do I just really want it?” “Do I really have the money to be spending on this right now?” “Will I still be using this next week? Next month? Next year?” If the answer is no, don’t buy it. Spend your money wisely. Don’t blow it all on silly stuff at this age.

6. Where you live at 17 (or 18) is not all that important

I know it can be tempting at this age to want to just get out of the house and go out on your own or to college and be independent. Trust me, I know. I know independence is the goal and yes, it should be, BUT… be smart about it. At this age, you don’t need to be spending $1,200 a month on rent. If you do get your own place, get a roommate (or 3) and get your rent into a reasonable amount. Live on campus if you go to college / university. Don’t stress about getting a really nice place at this age… it’s okay to live at home! It’s okay to sleep on a couch. Don’t spend unnecessary money on rent when you don’t need to.*

*I realize there are extenuating circumstances whereby people may need to move out and get their own place at an earlier age. My advice here is a sweeping generalization… you know your situation. Just be smart.

7. Get a job and learn to respect minimum wage

As soon as you can, get a job. Earn minimum wage and respect it. No, you don’t need to work 40 hours a week… but do work. Get a job at McDonald’s or as a hostess at a restaurant or as a car washer or a babysitter. Get a job cutting lawns or weeding gardens or walking dogs. Get a job. Earn money. Make minimum wage. Learn what it means to have grit and tenacity. Learn what work ethic should really look like. Learn what it takes to work hard and be proud of what YOU did and what YOU earned. While this tip, in particular, is something I *did* know at 17 (I had jobs from an early age and worked hard), it is one that can’t be emphasized enough.

Now what do you think? Do you have any personal finance tips for “M”? What things do you wish YOU would have known about money at 17?

5 Comments

I love these tips, Molly! I’m so impressed that M is thinking of this at 17! xx, I’m Fixin’ To

I agree with all of these tips, except for credit cards. It’s not a bad idea to get a credit card – just use it for gas (or some small purchase) each month, and pay it off to zero at the end of each month. This will help you build some credit history. Buying a car and making those payments each month also helped build up/strengthen credit history, but that’s a bigger financial undertaking that I put off until my early 20’s.

Having a strong credit score helped my husband and I buy our home at a reasonably young age. We didn’t need anyone to co-sign the loan because we had strong credit! (Alternatively, my brother had a short credit history, and had to have my parents co-sign the loan when he bought his home, even though he was 100% capable of making his payments).

Credit cards aren’t all bad, you just need to monitor your spending with them. Don’t buy more than you can pay off each month – pay it down to zero at the end of each month!

Molly touched on this in #5, but I thought I’d expand on the idea of delayed gratification. By saving up in advance so that you have the money for the things you need before you purchase them, you keep yourself out of debt. The other thing that delayed gratification does for you is to allow you time to cool off. I’ve found that there are times that I’ve decided I really want something, but by the time I’ve saved up for it I realize that I’ve gotten along this far without it and don’t really need it.

Also, knowing how to complete a W-4 and read a pay slip are very important. Unfortunately I see many young people really upset when they do their taxes and owe a great deal of money. When they reach out we generally see that they claimed exempt on their W-4 without understanding what they were marking. They also never looked at their pay slip to see that they weren’t paying taxes. Ask a trusted adult for help with this when you start working to make sure that you’re on top of that.

Number 7! Yes! I worked in a library from high school through college. I made more than minimum wage, but I made nowhere near what I make now (and shouldn’t have!). I learned so much from those jobs and those women I worked with! I love all of these tips, really. Especially the credit card one. That got me in college.

I truly hope she will read this and take every single nugget of wisdom to heart! I’m toying with not letting my kids know their social security number when they get older!! 🙂 Of course I probably won’t do that but I want them to avoid the soul-crushing feeling that is credit card debt!!