At some point in our lives, we wish we could go back in time and give ourselves some advice. If we performed better in some key points in life, who knows how different everything could be?
Life’s all about the journey as the saying goes, but it would be nice if I was able to tell my 20 year old self the winning lotto numbers. Might be a more luxurious journey at least.
But I’ve watched enough movies to know that telling ourselves winning lotto numbers or sporting event results would disrupt the space time continuum. (Back To the Future 2 anyone??!!)
So I would be content with teaching my college self a few solid life lessons. College is a critical crossroads for many. Make the right choices and getting your degree will most likely get you a nice job. Drop out and start a company and you will become the next Mark Zuckerberg.
If only it were that easy. There are a few lessons I would like to impart to my college self (geez has it been 15 years???):
Figure Out What You Want Before You Start
I didn’t really know what I wanted to do as a college freshman. I started with a general “business” major, then Philosophy and finally settled on Biology after I decided to become an optometrist. This was a 2 year process that should have been completed before I got into school.
I tell you, my college bound self, decide what you want to do with your life before you start college. That way you can have laser like focus on what classes you need to take. Taking classes you don’t need for your degree is a waste of time and money.
It will also allow you to work on your career outside of the classroom. You could find a mentor, look at potential graduate schools or find out how you want to live your life in your chosen career. This is a much better use of your time than eating mediocre nachos on campus while thinking about what the heck you want to do with your life!
So figure out what you want to do early on, and make that the focus of your time at college.
Student Loans are Easy to Acquire, but Hard to be Rid of
Think about how you want to pay for college before you get in. If student loans will be your primary tool, so be it. Just remember that you will be able to get a LOT more money than you really need. And that can get you in a lot of trouble once real life starts.
When you get that sweet looking award letter, don’t be fooled by all the money the school will want to give you. You don’t need all of it no matter what the projections say. All you have to do is sign on the dotted line and your school will benevolently give you as much money as you want.
Only it’s not your school that’s giving it. It’s most likely the government. And the government always gets its money back.
So make that sacrifice by eating cheap meals at home rather than eating out every day. Try to walk or bike whenever you can instead of saddling yourself with a car payment in school. And ask family for help. There is no shame in using your brother’s old sofa for your living room.
Consider Refinancing As Early As Possible
College self didn’t know too much about personal finance. During my second year of graduate school, we were informed that the interest rate on student loans will be going up from around 2% to 6%. I thought nothing of it at the time, but those 6% loans are the ones that seem to keep hanging around after all these years.
Education is key, so learn about how loans and debt repayment work as early as possible. Preferably before you get into school. Along the way you will find out about refinancing, and it is a wonderful thing.
Plan to pay off your debt by paying off the highest interest loan and then moving down the list. This will allow you to pay off your loans in the most efficient manner possible.
Consider refinancing your loans to get that interest rate down lower so you can pay the loans off even faster. I didn’t even think about refinancing until about 5 years after school. Dreaming of the money I could have saved makes me hate student loans even more.
Where to refinance? Earnest is a great company to work with. I have had a couple of loans refinanced with them and the process has been great. They were able to cut my interest rate by a couple of points and I saved hundreds of dollars in interest payments by refinancing with them. If your goal is to pay off your loans as quickly as possible, what’s not to like?
College is a time for discovery and growth. It’s when students explore new horizons and find themselves. But it would be nice if future me just found me pulled me aside and gave me the lowdown on how to prepare for life the right way. I’m sure he would mention the wonders of student loan refinancing.