Introduction
As a kid, I enjoyed learning about the subject of finance. At family dinners, we often read a book at the table, and many of the books we read were about finance (e.g., “Rich Dad Poor Dad,” “Rich Kid, Poor Kid,” Dave Ramsey, etc.). Sometimes the readings were boring and complicated, and sometimes the readings were quite interesting and informative. Finance can be easy and enjoyable to learn or not so easy or enjoyable, but there are always authors out there that invest their time to break down the basics, like David Bach or Dave Ramsey (both personal favorites).
I am writing this book because many young people do not take a personal finance class in college, high school, middle school, or elementary school. Many unwise and uninformed financial decisions can be easily prevented by simply understanding and applying healthy financial habits. There are not a ton of finance books out there that are directly addressed to students and recent graduates; hence, this is one reason why I wrote this book. I want to help inform all students and everyone else out there who wants to improve their financial situation in the most basic ways. This book will explain personal finance and provide you with some tools that will teach you how to stay in the driver’s seat of your financial status.
Finance does not have to be a difficult or taboo subject. Your financial future is something that should be talked about and addressed. The reason why so many students are struggling financially isn’t because they don’t make a lot of money; it’s because they do not know how to handle their money. As a recent graduate, I want to inform you that we don’t have to struggle while we are in school or out of school. Eradicate these false ideas from your mind:
- Student life and recent graduate life = a broke life
- Student life consists of fast food, low-quality food, and ramen noodles
- Young people do not need to know about finances until later in life
Take control of your financial life today and set yourself up for success. Money is often the root cause of many problems that are faced throughout life; and even though money is not the solution to everything, it sure does help—remember this.
Chapter 1: Spending
There will always be something else to buy and obtain. Why do you think they came up with the new phone plans where you get a new phone every 6–12 months? New ideas and products never cease to come about. Technology never stops developing. There will always be newer versions of practically everything—always.
Spending money can often feel good. You get something like a temporary “high,” probably because “feel-good” endorphins are released; remember this feeling is often only temporary though. Many things that people purchase tend to be classified as one of the following: pointless, not worth it, or soon-to-be-outdated. I am not saying that there is not a point to many of the things that we buy, but if we really paused to think more carefully about the things we consume our money on, we will often realize that the purchases aren’t really that important nor do they have long-term value.
So why do we continue to consume things that we don’t really need? For one, it’s fun. Second, many of the things we buy add convenience to our life. Three, some things we simply desire, and there is nothing wrong with having these desires.
Consumer Syndrome
Speaking from a specifically American point of view, Americans LOVE to consume; we enjoy getting the latest phones, the newest and hottest cars, huge houses we sometimes can’t afford, eating out, and engaging in constant entertainment (e.g., movie theaters). We are wired to consume, and the advertising industry ensures that we never stop consuming by investing billions of dollars into clever, persuasive, and successful marketing strategies. Since much of society loves to consume, it is easy to get caught in the never-ending cycle of living paycheck-to-paycheck and always consuming more than the income we bring in.
“Consumer syndrome” is a passive addiction to spending or having the constant urge to spend money. If you continue down this route, and spend more than you bring in, you will inevitably lead yourself into a mountain of debt. At the end of this chapter I list some applications that can help you track what you are spending; it doesn’t have to be complicated or a tedious process, but tracking each purchase can really help you see where your money is going. Once you are aware of where your money is going, you can then make the necessary changes to your spending habits.
Spend Less Than What You Make
It is entirely OK to spend money. Some people enjoy spending their money on clothes. Some people like spending their money on traveling and others on video games. Whatever you fancy is fine; simply ensure that your spending habits do not negatively affect you. Spending more than you are bringing in is never a wise thing to do; the key to building financial security, comfort, and wealth is to spend less than what you make. If you track what you spend every month, you will start to build an overflow of money (without even purposefully saving). Start tracking your spending today. It doesn’t take long to notice where your money is really going after you start tracking it.
Plan Your Purchases
If you are about to make a big purchase (e.g., car, computer, gaming system, TV, etc.), then take the time to think about it and financially plan for it before you buy the item. Often, we will change our minds about making a purchase if we take time to think about it first. Time is often your best friend with purchases.
Tip: If you go to the store and find something you really like, wait 48–72 hours (or two weeks) before you buy it. If after the 48–72 hours you still desire the item, get it—if you can afford it. If you don’t remember or even think about the item after this “thinking” period, then you did not want the item that much in the first place, and it’s probably something you don’t need.
Risk Assessment
Think of the purchases that you plan to make as potential investments. There are many factors you can evaluate when you make purchases. Listed below are a few main ones to consider that will help you save money:
- Does the purchase have long-term value?
- What purpose will the purchase serve?
- How will the purchase benefit me now and in the future?
Of course, you do not have to ask yourself these questions about every purchase you make or are considering, but these questions are good to keep in the back of your mind if you are trying to become more conscientious of your spending habits and truly want to make a change. The reason why so many people spend money so aimlessly is because they do not think about their purchases. It is also easier to not think about your purchases when you are using any type of card (e.g., credit card, charge card, or debit card). If you make a purchase with cash, then you will think a little bit harder about spending your money; the truth of the matter is, you tend to not feel the hit as much when you pay with a plastic card versus when you pay with cash.
Budgeting
Here are the pros and cons of budgeting:
Pros
- Stay informed of what income is coming in and what income is going out
- Keep your finances organized
- Spend less
- Save more
- Track and monitor your spending trends
- Notice where you can decrease your spending in different areas
Cons
- None
A budget is helpful for many. At the beginning of every month list all your expenses, income, and potential spending that you intend to make.
Document this budget in a format that works best for you (e.g., phone app, paper, phone, computer, etc.). Once you complete your budget, ensure your budget is in a noticeable and easily accessible place so you can reference it often and keep yourself financially on track for the month. I use the EveryDollar phone application. Another good application is Mint; both phone applications will help you keep track of your spending down to the last penny. These apps also give you a categorical pie chart to depict where your money is going in each category.
Chapter 2: Credit Cards
Getting Your First Credit Card
I still remember the first time my parents let me use their credit card years ago. My first thoughts were:
This is so much fun!
I now understand how easy it is for people to get into credit card debt.
I didn’t get my first credit card until a couple of months after I graduated from college. The main reason I wanted one was to gain travel points for purchases I already planned to make.
Why People Fall into the Credit Card Trap
I have never really been a fan of credit cards, and I never really knew what all they were about from personal experience.
I simply knew that many people used and overused credit cards, and that a copious amount of debt came from abusing them.
Now, I understand why so many people fall into the trap. You can buy whatever you want—depending on your limit—without paying it all back right away.
Zero Percent Interest
Many credit cards offer a beautiful perk called Zero Percent Interest. You can get a credit card that offers a zero percent interest rate for a period (e.g., 12–15 months) and not have to pay anything more than what you spent. Despite these “beautiful opportunities,” you still must pay them back eventually.
People who have zero percent interest cards often keep making purchases and pay only the minimum payment. Before they realize it, a year has passed, and they have maxed out the card or are close to it.
Credit card companies know this, which is why they happily offer zero percent interest to new applicants. Once the benefit ends, the interest often jumps to 10–30%. Some people do not even know what their interest rate will be afterward because they ignored that detail when they first got the card.
How Credit Card Companies Profit
Credit cards are a genius idea. Most people like consuming more than conserving, and credit card companies know this. They make billions from that simple truth.
Perks and Benefits
My favorite cards offer points toward hotels and flights, a full year of no interest, and cash back on purchases.
In my opinion, credit cards are most useful for:
- Rewards and benefits
- Emergency expenses you can repay quickly
- Business opportunities
If you get a credit card only to make frivolous purchases and pay the minimum, it’s not in your best interest. Credit cards themselves are neutral. How you use them determines the outcome.
When Credit Cards Help
Sometimes a credit card can be a lifesaver during financial hardship. It can also save money in the future by earning travel or cash-back rewards. They are tools—use them wisely.
Responsibilities
Always set up automatic payments for every bill, even if you’re great at remembering. We all forget sometimes. Automatic payments help you maintain a good financial record and credit score.
If you borrow money, repay it on time. Occasional hardship is understandable, but chronic lateness damages your credit and your reputation with lenders. Paying on time builds your score and earns lender trust. Some even reward automatic payments with extra benefits.
Takeaway: Set up automatic payments for your credit cards. Period.
Know Your Purpose
When I got my first card, I knew exactly what I wanted it for. Credit cards are tools, not toys. Use them intentionally and with discipline.
If you want a card for travel points, don’t apply for one that doesn’t meet that goal.
Hard Inquiries and Approvals
A hard inquiry occurs when a lender reviews your credit during an application. Multiple hard inquiries within a short period can hurt your score.
Get pre-approved first whenever possible. Research which cards match your credit profile before applying. If you need several cards, apply for them the same day or space them out by a few months.
Living the Cash Life
If you prefer to pay for everything outright and avoid debt, the “cash life” might suit you best. When you buy with cash, credit scores and lender relations matter far less—and that’s a strong, independent way to live.
Proactive Plan
Credit Card Pay-Off Plan
- List all credit cards with balances.
- Order them from smallest to largest.
- Create a debt-repayment plan with a clear payoff date.
- Consider consolidating debt if you have many cards.
- Ensure all cards are on automatic payment.
- Pay extra on the smallest card until it’s paid off.
- Add that freed-up payment to the next smallest balance.
- Repeat until every card is paid off.
Example:
- Discovery — Pay Off 6/30/2017
Balance: $600 | Minimum $20 + $80 extra - Wells Fargo — Pay Off 12/31/2017
Balance: $833 | Minimum $25 + $100 from Discovery - Best Buy — Pay Off Goal TBD
Balance: $2,500 | Minimum $40 + $125 from Wells Fargo
Monitor Your Credit
Use creditkarma.com to check your score and detect fraud early.
Takeaway: Check your credit regularly, stay alert for suspicious activity, and protect your financial identity.
Chapter 3: Student Loans
I despise student loans, but after a while I finally realized they aren’t the equivalent of the “end of the world.” No need to stress out about them, just pay them off.
- Decide when you want to pay them off completely
- Set up an automatic payment plan so you never miss your payments
- Pay more than your monthly required payment
And forget about them… seriously.
The SCOOP on Student Loans
Student loans provide a way to pay for education for millions of students around the country. Many people simply cannot afford to pay for college with their own resources. Furthermore, not everyone is fortunate enough to obtain scholarships that will afford them a free education. There are many types of student loans, but the main two categories are private and public student loans. Then there are subsidized loans and unsubsidized loans.
Private Loans: This type of loan is provided by private lenders. There are no federal forms to fill out for this type of loan. Usually when a person is unable to obtain public assistance, or they need more financial support, private loans come in handy. However, private loans are generally more expensive (have higher interest rates) in the long run in comparison to public loans.
Public Loans: There is often a federal form that you must fill out to obtain this type of loan. It is disbursed by governmental agencies. These types of loans are usually cheaper in the long run and offer lower interest rates in comparison to private loans.
Subsidized Loans: The federal government pays any accrued interest on this type of loan while a student is in school at least half-time. You also are given a six-month grace period after graduation, which means that you are not required to start paying your loan during this period.
Unsubsidized Loans: These loans begin accruing interest as soon as the loan is disbursed to the borrower. You are not required to pay until you graduate. Upon graduation, the interest that has accrued is simply added to the principal amount on the loan. Naturally, subsidized public loans are the best option because you pay less interest.
Takeaway
Overall, subsidized public loans are the best option because you pay less interest.
Paying Off Your Loans
Paying off loans can be expensive, especially if you are not working. However, you must pay them back. Most people do not qualify for or complete any of the loan forgiveness programs, which either significantly reduce your payoff amount or forgive your loan altogether. If you don’t take advantage of such programs or qualify for any of these programs, this means that you will be paying your loan back the old-fashioned way.
Four Student Loan Forgiveness Programs
- Public Service Loan Forgiveness: The balance of your federal loan is dismissed if you work full time for a governmental agency or nonprofit organization for at least a decade. This program is best for those who are already planning to pursue a career in the public sector. Only certain types of loans may be paid in this program, and you must make 120 payments on your loan before you can get the rest of the loan dismissed.
- Teacher Loan Forgiveness: If you are a teacher and work full time for a total of five consecutive years, then you can have up to a total of $17,500 in student loans forgiven (Direct Loans or Stafford Loans). You must work in a low-income public school, and you must also have taken your loans out after Oct. 1, 1998.
- Perkins Loan Cancellation: If you have a Federal Perkins Loan, you can have up to 100% of your loans cancelled if you work in a public service job (e.g., teacher, firefighter, nurse, police officer, etc.) usually after five years, but this can change on an ad-hoc basis.
- Income-Driven Repayment: This plan gives you the option to make your monthly payments based on a certain percentage of your income. This plan is targeted for people with large balances relative to their yearly income.
Please remember that these programs are subject to change at any time, and you always want to check programs for yourself to get more in-depth details.
There are many repayment plans and loan forgiveness programs well beyond the four listed. You can find more programs by doing your own research (which I suggest); you never know what programs you may find that fit your needs perfectly. Also, there may be people in your own social circle that have gotten their loans paid off. Ask around and see what opportunities the people in your circle have taken advantage of.
Takeaway
The goal of this section is to inform you that there are many opportunities available to you that will help get your student loans paid off if you simply search for them. Many employers now also offer student loan repayment programs. The key is to simply ask. You won’t be able to take advantage of opportunities that may be available to you if you never ask. ASK and SEEK for answers and opportunities and you will find them.
Paying Off Your Student Loans
- Decide when you want to pay them off completely
If you end up not finding any opportunities to help pay off your student loans, then you will have to buckle in and set up an automatic repayment plan to get those suckers paid off. The first step is to decide on a date you want to have all your student loans paid off. When you have a clearly defined target and plan of action that is written down, you will most likely reach your goal at the desired time—create a table or list with balances and payoff dates. - Set up an automatic payment plan so you never miss your payments
Automatic payment plans allow you to almost forget about keeping track of every time funds escape from your account. Ensure the funds are in your account to avoid overdraft fees. - Pay more than your monthly minimum payment
You will most likely have to pay more than your monthly minimum to reach your desired goal. The longer you take, the more interest you’ll pay. - Stop stressing and forget about your student loans
Once your goals and autopay are set, focus on the rest of your life. If payments feel heavy, let that fuel faster payoff or add a new income stream.
Takeaway
Don’t look upon student loans as negative; look at student loans as opportunities to enhance yourself. Value your experiences, opportunities, and the education you obtained from taking out student loans and continue to live your life productively.
Chapter 4: Saving
Why Saving Matters
You may not enjoy doing it now, but you’ll thank yourself later. Saving money is one of the most valuable habits for your financial future. Surprisingly, it’s easier than most people think.
Saving is like eating healthy—you may not see dramatic results right away, but the long-term rewards are worth it.
The Psychology of Saving
Saving money feels good once you see progress. It’s essentially paying yourself. You prove that you value your own well-being and future.
When Should You Start Saving?
The answer is simple: right now. The sooner you start, the less you’ll need to save later because of compound interest.
You don’t need to start big. Begin with 1% of your income and increase over time. The goal is to save at least 10% monthly, though more is always better.
How Much Should You Save?
It depends on your goals. If you have a retirement age or specific purchase in mind, plan around that.
Example 1
Donald wants $960,000 by age 60. He’s 20 now and earns $10,000 per month.
Plan: $2,000/month for 40 years = $960,000 (no interest included).
Example 2
Terry wants $300,000 by age 50 to buy a home in cash. She’s 30 and earns $6,000 monthly.
Plan: $1,250/month for 20 years = $300,000.
The Emergency Fund
Dave Ramsey calls it the emergency fund, not the “rainy-day fund.” Keep $500–$1,000 to start, then build it up.
Emergencies happen—car repairs, medical bills, sudden expenses. Having funds ready brings peace of mind.
Three to Six Months of Expenses
Save enough to cover 3–6 months of your total monthly expenses. If your expenses are $1,000 per month, aim for $3,000–$6,000. This cushion offers security and time to recover from job loss or major life changes.
Saving Equals Preparation
Saving is preparation for the unknown—both the bad and the good. Unexpected opportunities, like travel or investments, also require resources.
Money doesn’t make life perfect, but it removes stress from uncertainty.
Start Today
Begin saving now, even if it’s only $1 per week. Consistency matters more than the amount. Small habits compound into major results.
Chapter 5: Investing
“Compound interest is a beautiful phenomenon.” — Destiny H.
Definitions:
- Mutual Fund — Diversified holdings that are professionally managed and funded by shareholders.
- Investing — Expending money with the expectation of gaining a profit from those expended resources.
- Stocks — Resources raised by a business or corporation through the issue of shares.
- Compound Interest — Interest calculated on both accumulated interest and the initial principal.
Investing is one of the most powerful actions you can take with your money. It lets smaller, steady contributions grow significantly over time.
Compound Interest Calculator
Search for “compound interest calculator” and try scenarios to see how rate, time, and contribution affect outcomes.
Millionaire Mindset
Compound interest makes millionaire status possible.
- $100/month at ~10% for 40 years ≈ $530k–$585k.
- $2,000/month at ~10% for 40 years ≈ $10–12M.
If investing terms intimidate you, get a financial advisor and learn the basics yourself.
You can invest aggressively or moderately. Mutual funds often blend risk for growth and stability—great for starting out.
Proactive Plan
If you haven’t started, schedule a meeting with a reputable firm today. Even $10/month matters. If your employer offers a 401(k) match, take it immediately.
Takeaway
Investing is critical and powerful. You don’t need a finance degree—just start, be skeptical/wise, and keep learning.
Chapter 6: Ways to Earn Extra Income
There are always multiple ways to earn extra income.
If you didn’t land a job immediately after graduation, celebrate the degree and use this time to bring in money. From personal experience, here are five ways:
Five Ways to Earn Some Extra Money
- Tutoring
- E-commerce (Amazon & eBay)
- Teaching music, dance, or any type of lessons
- Upscale cleaning jobs
- Thank-you letters
Tutoring
Subjects (math, science, history, English) and beyond (jewelry making, astronomy/astrology, law, medicine, nutrition, English help, fitness, organizing, college apps, research).
Marketing ideas: local signs, business cards, networking, referral rewards, limited-time promos.
E-Commerce
Sell electronics, phones, games, laptops, clothes, brand items via eBay/Amazon/Craigslist. For serious play, explore Amazon FBA (buy product, ship to Amazon, sell for more).
Teaching/Giving Music & Dance Lessons
Monetize your instrument or dance skills. Rates vary by region; half-hour and hour options.
Marketing: word of mouth, LinkedIn, clean readable signs.
Upscale Cleaning Jobs
Target luxury homes/condos for higher rates ($40–$100/hr or flat). Match service quality to price.
Thank-You Letters
Express gratitude to people who supported your journey. Don’t expect returns, but gratitude often opens doors.
Takeaway
There are always ways to bring in income. Entrepreneurial mindset + consistent effort = results.
The information provided in this book is for educational and informational purposes only. It should not be considered financial, legal, or investment advice. Always consult with a licensed financial advisor, accountant, or attorney before making decisions regarding your personal finances, investments, or legal matters. The author and publisher assume no responsibility for any financial outcomes or losses that may result from the application of information contained in this book.
© 2017 Destiny S. Harris All Rights Reserved.