Hi there to anyone "brave" enough to read this. My name is Michael and I am the proud dad of two great boys (one of them a soccer player---hence the "original name") and the proud husband of a wife who seems to clean up after me just as much as the kids. I have a job, a house, two cars, friends, family, debt up to my eyeballs, and more stress than i can easily squeeze into what few leisure activities i am afforded in life. In short: I think i am like about a million of you out there, so hopefully some of my thoughts will ring true. Well here it goes:
"If you can't be a good example, you can serve as an example to others"
I chose this quote because I look around at my friends and see myself so many times as the "before success" picture. I blame it on personal mistakes, instant gratification, and just dumb (mostly financial) decisions. If i could only go back in time and undue some of these dumb decisions; would i be in the shape i am in now? SO for all you kids out there...here are 3 things to NOT do while in college:
1. Never, Ever, EVER sign up for the credit card with the 500 dollar limit
2. Never sign up for a personal line of credit attached to your checking account
3. Never use a department store credit card to buy clothes you cannot afford
Why say that? Don't all of these things help establish credit history so you will be able to take a loan out for the car or house or boat later on in life? Sure they do, if you are responsible. Most college students i know do not have the financial capacity on their own to balance this much credit. What happened to me is i ended up paying credit card payments for one card with cash advance checks from another...very stupid...please use this as an example of what not to do!
My advice now looking back in the mirror would be:
1. When you have the financial means, go ahead and sign up for your favorite department store card to get the 10-30% off or what ever.
2. When the bill comes in, pay it off
3. Use the card ONLY when you: (a) have the money to pay it off (b) when there are incentives like deep discounts and extras being offered...that way you end up getting to use their money during the grace period but end up getting paid in discounts or other services just for borrowing their money
4. As your financial means increase, go ahead and apply for another more general type of card; but make sure the card has: (a) no annual fee and (b) you can get incentives like discounted gas, groceries, airline points, etc for using it.
Dont worry too much about the extremely draconian interest rates since you are paying off in full each month.
Remember: Having an emergency source of income that you can access via credit card (like bail money in Mexico when you get locked up on Spring Break) is something to be desired, but do not fall into the buy now, pay for it when i have the money trap that I fell into much to my displeasure.