Ep 27Money Tips for Teens & Young Adults (live at HAFTR)
When $70,000 a year in student loans is worth it, and when it isn't
Stacey Zrihen
Money Tips for Teens & Young Adults (live at HAFTR)
with Stacey Zrihen
Don't ever spend money you don't have except maybe to buy your first home.
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Quotes
“If you don't have it, don't spend it.”
“Everybody lulls themselves into this belief that they're really not spending that much.”
“Anyone who has debt should not use a credit card.”
“Everybody needs a budget. I don't care if you have $100 million.”
“There's nothing wrong with spending money you have. It gets tricky when you're spending money you don't have.”
“The only difference is I'm not shy to ask questions.”
Takeaways
- 1 Money lessons land hardest once you earn your own money. A student who customizes sneakers started saving on his own.
- 2 When money flows freely from parents ('Can I have?'), there's no reason to be careful. A fixed amount teaches through consequences.
- 3 Many clients assumed they'd carry credit card debt after marriage because their parents did. Kids copy what they see at home.
- 4 Card interest compounds: an unpaid $100 becomes $118, then $136. A $100 pair of shoes can end up costing $250.
- 5 People are often way off: clients who guessed $10K a year on clothing were spending $20K, and $350 a week on groceries turned out to be $650.
- 6 Compounding: $6,000 invested once at age 21, earning 10% a year, grows to close to $1 million by 67 without adding more. Starting at 55 means putting away hundreds of thousands.
- 7 The S&P 500 has averaged roughly 10-12% a year over 30 years, with ups and downs along the way.
- 8 Teachers and government workers often retire as millionaires because a bit of every paycheck goes into a plan someone else manages.
- 9 Borrowing can make sense for a top law school leading to a $210K big-firm job. Big loans for lower-paying fields take years to pay off.
- 10 'Know your station': a rebbetzin's answer on lavish spending. If you can afford it, enjoy it. The problem is spending money you don't have.
- 11 Credit card debt is never OK, apart from a true life-or-death emergency. A mortgage is 'acceptable debt'; aim to pay it off once all other debt is gone.
- 12 She supports higher education and favors city or state schools over private ones unless the payoff is clear.
- 13 Good credit mostly matters for getting a mortgage. On student loans, know when interest starts, and pay them off as fast as you can.