Money Morons

For the most of us, coming out of post secondary education means starting payments to your student loans- not exactly something to look forward to. If you are realistic with yourself, however, you can manage it quite easily and be out of debt in no time.

I've come to realize that a lot of parents never explained to us gen-Y babies how finances really work- making most of us money morons. No one explained to me the logistics of a credit card, the realities of interest, or how to manage a proper budget. Every time I received a new loan, I would think to myself, "Yay! More money!" Ohhh, how I was terribly, terribly wrong.

After a lot of research, I'm finally figuring out how to get a grip on my finances, rather than my finances having a grip on me. Reluctantly, I went through all of my debts and added them up. Note that that includes three credit cards, one line of credit, and one government student loan. The total came to a whopping $40,000. I was astounded, spent a day crying, then realized I need to get a grip on things and start paying this off ASAP.

First things first, I made a budget. The categories included:

• Rent
• Groceries
• Debts (Credit Card #1, Credit Card #2, Credit Card #3, Line of Credit, Student Loan)
• Dog Food/Vet
• Transportation
• Fun

I also canceled my gym membership (I can run outside and use weights at home), my monthly charitable donations (I volunteer instead), and I got really lucky with my dad offering to pay my phone bill and car insurance (#typicalGenY... Relying on parents... It's a hard cycle to break, okay?)

I put all the necessary payments towards my fixed expenses. With what ever money is left, I add some to my "Fun" category, and the rest goes to additional debt payments.

My credit cards have the highest interest rates (19.5%) among my debts, so I'm working on paying those off first. If you have a credit card with $1,000 on it, an interest rate of 18%, and you make the minimum payment of 1.5%, you end up spending $9,015 in INTEREST before you manage to pay it off! Not to mention it will take years to pay it! Suddenly that $1,000 has turned into $10,015.

Worth it? No, I didn't think so.  

 

The trick is to pay early and often. If you have any extra money, put it onto your credit card (or your highest interest debt), while maintaining minimum payments on all of your other debts. Stop buying coffee at Starbucks- or coffee anywhere for that matter. Pack your lunch. Stop buying magazines, and new clothes, and movie tickets, and drinks at the bar, and nice meals out. Stop spending money on things you don't need!

It won't be forever, so relax, you'll be fine. Being out of debt (and not accumulating ridiculous interest fees) is so much more worth it in the long run.

Then as you pay off each debt, add that payment to the next debt with the highest interest rate, and you'll see a snowball effect. Before you know it you'll be debt free and kissing those payments good bye!

Here are some other tips to reduce your spending, and in turn, reduce your debt:

• Call your financial institutions and see if they can reduce your interest rates, or change your account to one with less bank fees.
• Consolidate your loans (so you are only paying one interest rate).
• Comparison shop, or use coupons when at the grocery store, and put the money saved towards your debts.
• Cancel subscriptions (magazines, cable packages, gym memberships, charitable donations).
• Stop taking money out at the ATM and paying those unnecessary bank fees.
• Go on a cash diet (I realized I spend a lot less when I can physically see the money, rather than paying on plastic).
• Look into free festivals, events, and activities in your area. There are a lot of good ways to have fun without spending money.

When it comes to savings, I have personally decided to pay off my debts before I save. Some of you might say that this is a bad decision, but it's what I've decided to do.

Let me know if you have any other good tips on how to save, spend wisely, and reduce your debt. I'd love to hear from you!

Rebecca

Social Media: Helps & Hurts

Growing up in the digital age, we are all too familiar with the ins and outs of social media. It's difficult to be a gen-Y baby and not find social media tangled throughout our daily lives. Although it's proven to be useful to connect with friends, share photos, and stay up to date with the latest news, it's important to learn how to use social media in an effective way when getting ready to apply for jobs.

You can guarantee that in today's hiring market, your employers will be looking you up on Twitter, Foursquare, Instagram, Facebook, Tumblr, Google+, and everywhere in between. Make sure that you are only presenting them with information you would be proud to share. Photos of last night's shenanigans at the bar? Maybe not the most appropriate display of yourself. So leave it off of social media platforms.

Consider cleaning up your social media sites. Although it can be daunting, it's definitely worth it. Always ask yourself, is this something you would want your parents, bosses, or children to see? If the answer is no, then it's not worth sharing online (and maybe not worth doing in the first place).

Things I recommend keeping off of social media include:
1. Controversial viewpoints (you wouldn't walk into an interview and start talking about your opinion on politics or religion, so keep it off of social media!)
2. Personal conversations (you also wouldn't go into an interview and tell them all about personal issues, so why share it online?)
3. Photos of you (or your friends) drinking, wearing revealing clothing, or doing inappropriate things (so start untagging, my little gen-Y's!)
4. Confidential information (that goes for personal things as well as information about your previous employers)
5. Negative comments (I'm sure this goes without saying, but online bullying, or anything of that negative nature, is really not okay. Like my mama always said, if you have nothing nice to say, then say nothing at all!)
6. Any posts that would make you seem untrustworthy, lazy, immature, or overzealous

I also suggest NOT linking profiles together (e.g. when you post on Instagram and it shows up on Twitter because your two profiles are linked). I use Twitter for my professional life, but Instagram for my personal life (my Instagram is set to private). Although I'm not posting inappropriate things on Instagram, I don't want photos of my dog or last night's dinner showing up on my Twitter account. It's definitely important to be aware that if you link your profiles together, what you share in one social media world can be seen in an other. Don't forget it!

Try to focus on posts that enhance your better self. Create relevant profiles that include your work experience, volunteer experience, or personal achievements. LinkedIn is an excellent tool to display your work experience, and everything you would want an employer to know about you professionally. Blogging is an other great way to display engaging content that represents who you are, and Google+ can be a great tool for connecting with others.

If you are adamant about keeping your social media sites the way they are, consider using an alias name, or changing your privacy settings to make it difficult for others to look you up. Also, remember that most employers will check up on you on social media sites. Be sure to not call in sick then go out partying that night, or you might find yourself fired by Monday morning. Honesty is the best policy, and reliability is key.

So, at the end of the day, remember that it isn't oversharing that will hurt you, it's sharing things that will make you look like a bad hire that will come to bite you in the butt!

Comment below, and let me know your thoughts. Do you have any other suggestions for using social media effectively?

Rebecca