Sometimes We Just Need To Listen
Paul Goebel, Director
Researchers affiliated with the University of Chicago’s Booth School of Business and the University of Maryland’s Smith School of Business recently found that consumers who realize they are spending more than their peers (similar ages, incomes, locations, and credit scores) will actually cut back on their spending. I came to the same conclusion after my first year working as a new college graduate in the mid 1980’s.
After nearly a year of looking for a job in Texas after I graduated with a newly minted college degree in 1986, I had enough. I accepted a friend's invitation to relocate my job hunt to Southern California. I was fortunate to be offered a job my first week on the coast. My new office was right down the street from the happiest place on earth – Disneyland. The beach and mountains were an hour away. What could be better?
My paycheck.
I never realized (or even calculated) how quickly a paycheck is reduced by federal taxes, state income taxes, and other deductions. After that first year of working and living I ended up nearly $10,000 in debt. I was living in an apartment that ate up almost 70% of my monthly pay. Luckily, my wallet was full of credit cards ready to be charged up. After I complained once too often to my friends about my worsening financial situation, they told me to shut up and listen.
Their advice put me back on a path to financial stability:
• Make savings a priority.
• Pay off debt sooner than later.
• Don’t spend money you don’t have.
• Follow the 50-30-20 Money Plan*
• Don’t live the lifestyles of others if you can’t afford it.
Fortunately I listened. Today as the director of the UNT Student Money Management Center, I still share this same advice with students. Why? Because it’s good advice even after thirty years.
If you need a plan for your money or feel you are losing control of your money, schedule an appointment for a personal coaching session with the center. We are here to help Eagles soar.
*Take-Home Pay: 50% Essentials, 30% Savings, and 20% Quality of Life/Fun.