Dear College Kid: Stay Frugal As Long As Possible

Dear College Kid is a series I write to my younger self. I would send them too, if I could somehow teleport myself via time machine to my late teens and early twenties. I hope other college kids find these letters, and garner some foresight that I myself had lacked. It’s not finance advice by any means, but rather, personal anecdote. Still. I hope it changes lives.

I remember what it was like to live as a college student. Those who paid their way without a free ride to college would agree: the finance part of it was brutal. Rationing out food, opting to buy the cheapest groceries, and looking for ways to save on rent was part of my college experience. It’s like living paycheck-to-paycheck. You may not realize it now, but much of college is about learning to flex your frugal muscles. While that may sound horrific, I think there is a benefit to learning this skill. In fact, I would even go so far as to say, stay frugal as long as possible, even after graduation.

There are many ways in which my lifestyle today looks similar to my college days. Erase drinking cheap booze, the bad habits of staying up at night and eating cheap food and the books. But, the way I spend my days and money now are quite similar to how I did then. Although some people will think that’s sad, I don’t agree. Why? Because I’m in it for the long-haul. And like most long-term endeavors, it pays to bootstrap at the beginning. Spend less, pay back debts, invest more, and talent stack while building your empire.

Since you’ve had excellent practice living with less in college, why not take those soft skills and use them to build wealth? The biggest mistake college grads do is succumb to lifestyle creep. It’s a very real thing. I wrote before the real reason doctors can’t pay back their student debt: because they won’t.

Here are my top frugal life hacks:

By the way, the ULTIMATE LIST of things I have given up in the name of frugality can be found here.

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Dear College Kid: Experience Trumps Degrees

Dear College Kid is a series I write to my younger self. I would send them too, if I could somehow teleport myself via time machine to my late teens and early twenties. I hope other college kids find these letters, and garner some foresight that I myself had lacked. It’s not finance advice by any means, but rather, personal anecdote. Still. I hope it changes lives.

Dear College Kid,

Let me be the first to tell you that experience will always, always trump degrees. You can pay a lot of money to go to school (I paid over $575,000 for example!) or have formal training by lieu of classes, but at the end of the day, a newly graduated kid with a license will not add as much value to a company as the one who volunteered in the field and has solved its problems.

I liken it to applying for university. GPAs now mean diddly squat. The California UC system has written off the SATs. Whatever grades or awards you got in high school isn’t as important as what you’ve done. Extra curricular activities, previous projects, volunteer opportunities … in other words, how much of the world have you seen and contributed to? This is what’s important.

To be honest with you, we are entering a time period where the college degree becomes less relevant. I would love to live to see that one day. But even now, I see kids who have solved problems in a field or gained hands-on experience through shadowing or volunteering trump new grads. That is especially true in software, computer programming, digital marketing, finance and art. (Unfortunately, the healthcare field still requires official stamps on paper.)

Let me tell you that most jobs I did never required a degree. I didn’t get a degree on writing, coding, digital marketing or website production to create this blog. Everything was learned as I went along. I never got a culinary degree to open my own bakery. But my experience making bread surely helped. It required no paperwork to create a pet sitting business. Not once did I work at a vet’s office, groomer’s or pet store. I do not have an accounting degree, a finance major, or past sales experience. Yet I am a wholesale director for a bakery who runs the billing, the accounting, and manages wholesale clients.

For six years, I never even had my diploma. I did not realize I lost it, because no one ever asked for it. Even though I have started five new jobs since then. Just recently, my dental office asked if they could hang a copy of it up. I searched frantically to no avail. My mom finally found it jammed between some canvases of art in my parent’s garage.

That’s a metaphor for what my degree is: A work of art, that no one cares to look at.

Instead, be a muse. Have a story to tell, filled with experiences and lessons learned. THAT is worth something!

However, you may already be in college trying to earn that paper. That’s fine. But here are a few ways to talent stack:

5 Ways To Gain More Experience

  1. Learn a new skill.
  2. Volunteer in your field.
  3. Shadow a professional.
  4. Explore YouTube or blogs.
  5. Work on self-improvement.

All the best, ’til next week!

Dear College Kid: What Are Your Summer Plans?

Dear College Kid is a series I write to my younger self. I would send them too, if I could somehow teleport myself via time machine to my late teens and early twenties. I hope other college kids find these letters, and garner some foresight that I myself had lacked. It’s not finance advice by any means, but rather, personal anecdote. Still. I hope it changes lives.

Dear College Kid,

What are your summer plans? Do you have a trip somewhere far away? Will you be on the road, or by the beach? Or will you be looking for a job, having graduated this year? Whatever it is, I hope you find time in between your play to plan for the future and get ahead. Not to be a kill joy, but someone’s got to remind you that now is not the time to be lazy. You can enjoy your break, but balance it with making some moves. It’s equally fun!

I write about becoming 1% Better all the time. I write them for you. Here are a few self-improvement ideas that you can implement this summer. It doesn’t have to be all of them, but I promise you will feel more fulfilled and refreshed if you partner relaxation with productivity. They feed on each other very well.

Productive Ideas for your Summer Break

  1. Declutter your things (and then the rest of your life) in order to gain clarity on who you want to become.
  2. List 10 habits that would make YOU better each day. Then create a goal to do all ten every day. These are mine. Habits will make your life easier in the future.
  3. Learn how to optimize scheduling your day to be more productive.
  4. Identify the ONE thing you want to achieve this summer.
  5. Hone your skills or learn something new in Skillshare.
  6. Create your budgeting tool so you can learn to manage your spending at a young age.
  7. Learn how I Bonds can help pay for college.
  8. Clean your apartment, so you have more thinking space. Develop the habit of keeping it clean 24/7 (which may sound crazy!) so that you don’t have to clean as much in the future.
  9. Start preparing for financial success post grad.
  10. Get student loan advice. The earlier you start, the sooner you’ll be financially free to live your dream life. I highly recommend Travis Hornsby and his team at Student Loan Planner. Andrew Paulson, from White Coat Investor, is another option. 

As I said earlier, balance is key. Have some fun this summer too. Do not waste it away on social media, watching television, or perusing YouTube. Such things would only take up space and fill your head. Summer is time for a real reset. Check out these 50 analog activities that resist the attention economy to ensure you get the relaxation you need.

And don’t forget to check in every Monday for a new letter to my past college kid self.

Dear College Kid: Choose the Cheapest School

Dear College Kid is a series I write to my younger self. I would send them too, if I could somehow teleport myself via time machine to my late teens and early twenties. I hope other college kids find these letters, and garner some foresight that I myself had lacked. It’s not finance advice by any means, but rather, personal anecdote. Still. I hope it changes lives.

Dear College Kid,

Specifically the college undergrad hoping to enter grad school. (I am also addressing my past self.) I beg you, choose the grad school that costs the least amount of money. It doesn’t matter how well known they are, it doesn’t matter if your parents or friends went there, it doesn’t even matter if you like it. It matters most that it’s the cheapest.

At the end of your grad school career, you will walk away, diploma in hand regardless. You may also walk away with a large student debt. If you choose the cheapest school you can possibly go to, you will have an advantage over your peers. You will be starting your life at a better starting point.

I would love to teach all college students to choose grad schools based on price. If more kids opted for cheaper schools, perhaps elite schools wouldn’t charge so much. A decrease in their applications will certainly give them pause. What if no one applied to the most expensive schools in the country? Trust me, those private institutions will start to wonder why. Let’s not feed them our young.

Starting a career with less debt is equally as good as starting a marriage with less debt. You want the foundation of your life to be on solid ground. If you begin life in the red, then you will encounter more struggles than the people around you. There will be more restrictions with what you can do.

This isn’t to say you can’t live a flashy and glamorous life. You certainly can, but you are restricted to a loan forgiveness program. Or you have to work more hours. Or you may be tied to a job that you hate in order to pay the bills.

But if you start your life with less debt, you will have more freedom to choose how that debt is repaid. You can be ahead of the curve and have a higher savings rate. With more savings, you will reach your financial goals quicker. You can work less hours, leaving time to learn about investments instead. Or you can focus on building careers around your passions rather than your degree.

There are so many benefits to having less student debt. I really implore you to consider the following:

Choose the college that will cost you the least amount of money, because that may also be the path of least resistance to financial success for new grads.

At least, that’s what I would tell my past self. I hope she listens.

If you’d like to speak to a professional, I have a recommendation! Speak to Travis Hornsby and his team at Student Loan Planner. They are knowledgeable and give great advice.

Dear College Kid: Pursuing Medicine Will Not Get You to Financial Independence Faster

Dear College Kid is a series I decided to write to my younger self. I would send them too, if I could somehow teleport myself via time machine to my late teens and early twenties. I hope other college kids find these letters, and garner some foresight that I myself had lacked. I hope it changes their lives.

Dear College Kid,

Have you ever heard of the term FI? More importantly, do you know of the FIRE community? Standing for “Financial Independence, Retire Early”, FIRE is a concept that aims for the option to be free from needing to spend forty years of your life working. Not to be confused with your life’s work, FI aims to free people of your job, if and when you choose to do so, in order to do your life’s work.

What I am here to tell you is this. If you’re dream is to pursue FI, then the medical profession is not the best, most practical route. I’m a dentist, who graduated from dental school at age 26 with more than half a million dollars in student debt. Now imagine being a doctor finishing residency at age 30, or an oral surgeon finishing at age 34. What you have as a college kid that I no longer do is time on your side. Time to get a head start, time to reach freedom more quickly and efficiently. Time to start opening doors.

At 21, I had no idea FIRE existed. It’s unfathomable for me to even think that I would have understood that work is not necessary in order to live a good life. A 21 year old graduating with zero (or very little) student loans, pursuing a desk job and saving  their income will have a 5-10 year head start on a 30 year old medical professional graduating with hundreds of thousands of student loans and saving none of their income because it is all tied up in debt. I will start at 36 years old at $0 in the bank if I spend all my income right out of school and funnel it to paying down my student loans (something I’ve talked about before). Meaning, the 21 year old with the desk job will have 15 years ahead of me in savings. On top of that, those savings have been racking up compound interest for 25 years. Assuming a moderate 6-7% return rate, those 15 years makes a whole heck of a lot of difference!

Off course, if you are pursuing the medical field, I am not dissuading you entirely, if it is what you WANT to do. The medical field is great! I love my job, but that’s because I did not go into it for the money. If you want to become a medical professional because it’s what you want to do for a long time, then by all means, you will be very happy! If you want to enter the medical field because you want to be RICH and that’s your goal in life, then you will be successful. BUT, if you are pursuing freedom or FIRE, and you think the medical field will get you there quicker because of the higher salary, you are incorrect. There are people in the FIRE communities who retire at 30 years old. If you go into the medical field, unless you have relatives that can pay for your entire tuition and you graduate debt free, well, you’ll still be at net-zero at 30 years old, but at least you have the means to get to FIRE by mid-to-late thirties perhaps. Most parents, however, cannot support med school, and if you graduate with a medical degree AND a ton of student debt, then you’ll be reaching FIRE later than your other FIRE friends. See what I mean?

This does NOT mean, pursue a desk job that you hate in order to reach FI. We reach for FIRE in order to be happy. There is no point putting yourself through misery in order to get to FI because you’ll be giving up happiness in order to do it. Some people say, “Well, I’ll just put in the work and hate my job but get to FIRE faster and THEN I will be happy.” But will you really, though? Reaching the end and never working a day in your life does not guarantee you will be happy. True FIRE pursuers recognize that it isn’t about the end goal, but the journey. It’s about gaining your freedom in the future, without giving up your freedom now. Otherwise, you’ve read FIRE all wrong.

Alternatively, FIRE is not entirely about Retiring Early. It’s about having the option to not work at a job, in order to pursue something else in life that will lead to more happiness. Ultimately, this all boils down to entering a profession for the right reasons. If you find a profession you love, you may not need to retire at all. I find myself happier than a lot of my colleagues, some of whom have only been out a few years and are already “sick of it”. They want out! Unfortunately, they are far from being free because of their lifestyle, or their debt, or a combination of the two. I am happier because I did not enter the field solely for money. I am happier because I do not need as much money in order to live, and can therefore choose how much of my life I need to give up in order to live a happy one. As I’ve said many times before, having money dictate the way you live your life is not a good thing. Whether that’s a lack of money, or a plethora of money. My dream is to free myself from student debt, go FIRE, and eventually travel the world and work for free as a dentist in third – world countries. To give back to communities that dentists never touch. I will likely never be “rich”, but my life will be. I am very, very happy, because I am doing what I love.

So in summary, enter the medical field if it is something you are very interested in or really want to do. (Sage advice: enter ANY profession because it’s what you want to do.) Do NOT enter the medical field, thinking it is the quickest way to get you to financial independence. It’s not the fastest, and it’s not the easiest, either.

For those just hearing about FI, here are a few of my favorite blogs and podcasts:

Welcome to the rabbit hole.

Dear College Kid: Graduate from Undergrad in Three Years and Save $$$

Dear College Kid is a series I decided to write to my younger self, if I could somehow teleport myself via time machine to my late teens and early twenties. I hope other college kids find these letters, and garner some foresight that I myself had lacked. I hope it changes their lives.

Dear College Kid,

Are you in an undergraduate program trying to plan what classes to take? Or better yet, are you a high-schooler, looking far ahead into your future, trying to figure ways to save? Here’s some advice:

Try to graduate in three years or less, and save $$$!

Related Topics

The first step: Stop the Negativity!

You may be saying to yourself some of the following negative self-talk, but I want to address them now and talk you out of that nonsense. Nip it in the bud, so to speak.

Avoid the following negative thoughts:

  • “Graduating in three years requires a special program, which my school does not have.” Not true at all! I myself graduated from a four year undergraduate college, in a three year span of time. All you need to do is hit your particular program’s requirements, and that’s it! Just make sure to plan ahead.
  • “Only Einsteins and nerds finish early because you need to be very smart in order to graduate in three years or less.”  You need to be very organized to finish early, not necessarily smart. It may require a bit more effort, but it does not mean that some people are born with the ability to do this and others are not. Everyone should at least try. If you don’t end up finishing in three years, you should be just as proud to finish in three years and one quarter. Every little bit that you shave off of your schooling counts!
  • “Graduating early means I won’t have my FULL college experience! I will miss out on some of the fun my friends are having.” Actually, quite the opposite! Finishing school in three years freed up that last year when all my other friends were still in school. It gave me the chance to work three jobs, and I had a more flexible schedule than my friends who were still in college! While they had to plan for tests and study for exams, I was able to move my work schedules around to make time for lunch dates, or hang out nights. If anything, I was able to experience MORE than they did!
  • “What difference does an extra year make? Shouldn’t I just take classes that I am interested in or that I enjoy FOR FUN while I’m at it? What’s another couple of thousands of dollars?” If I could kick my young self for having this kind of mentality, I would. Back then, I did not understand the value of compounding interest. I did not have a sense of the value of time. I did not realize that something so small now, can make such a big difference later. The money you save from finishing undergrad early can be invested into something that will give you a higher return over time, rather than be taken out as a loan that will be charged interest over time. Instead of losing money, you could be earning money. Time is on your side, and investing early is the way to go!

Ways To Graduate Early

There were many things that I did to allow me to graduate one year early. If I had a do-over, I would do even MORE, to try to shave off a little bit more time. Here are some tips!

  • Take as many AP (Advanced Placement) or IB (International Bachelaureate) courses in high school as you can. I did the work in high – school. I took 11 AP courses in high-school. The great thing about these is that some colleges accept certain AP classes as credit towards general education college courses! I entered my first year of college as a “sophomore” and had first choice in which courses I wanted to take, which made it even easier to plan ahead!
  • Plan your course of action. When I entered college, I was given a list of classes that I was required to take in order to graduate early. I kept that list throughout my whole college career and when it came time to choose classes, I would simply go through the list and find classes that I wanted to take but were also required. It wasn’t until my final trimester (we were on the trimester system) that I took a class that was not a requirement, for fun. Why did I do that? Because it gave me the units I needed to be considered a full-time student, which had a flat rate and which actually made the tuition cheaper than if I paid per unit to be a part-time student. Go figure!
  • Take as many units as you can handle. The minimum units you need to be considered a full time student was 12 units. You can likely graduate in four years taking 12-15 units a trimester. But I had other plans. I was taking 16-20 units a trimester, and one particular trimester, I believe I took 22 units. The exception was my final trimester, where I took only 12 units, the minimum to be a full -time student.
  • Stay focused. You are here for SCHOOL. The biggest excuse I heard recited to not take more than 12 units at a time was that early twenty-somethings want to enjoy life. They don’t want to be focused on JUST school work. They want to have time to go to parties, hang out with their friends, make new experiences. But you are at college for school. Focusing on that doesn’t mean you won’t get those new experiences, or have a good time.
  • Don’t listen to the naysayers. When I told others that I was going to finish college early, there was a lot of pushback. In the early stages, I had a lot of people telling me it would be difficult to do, that I would stress myself out too much and hate college all-together. When that didn’t happen, they said that I was missing out. As it got closer towards the end of my college career, I started having people trying to convince me to stay. “Just take classes for fun!” To which I replied, “I’d rather live life, for fun.” Don’t listen to the naysayers who think you can’t do it. Don’t listen to people trying to convince you you’re missing out. And definitely don’t listen to those who try to convince you to stay even longer, and spend more money or take additional loans. The person you should be living life for is yourself, and your future self will thank you.

If you need further convincing, maybe math will do the trick.

Tuition Costs Saved by Graduating in 3 Years: $8,000

Additional Money Earned by Working 3 Jobs in the Final Year: $18,000

The Difference: $26,000, which I funneled into student loans and credit card debt. 

Hope this helps kick ya in the rear and get you faster towards getting out!

Sincerely,

TheDebtist

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