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Hey graduates: How ‘money smart’ are you?

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opinion Detroit Lakes,Minnesota 56501
Detroit Lakes Online
Hey graduates: How ‘money smart’ are you?
Detroit Lakes Minnesota 511 Washington Avenue 56501

You’ve heard of being “book smart” and “street smart,” but how about “money smart?”

When it comes to making financial decisions, many people are clueless. Some believe the whole topic is just too complicated to understand and give up before they start. Others didn’t spend time acquiring the knowledge before they started earning a steady paycheck because they didn’t have money to spend.


In the coming weeks, more high school students than ever will get their diplomas and began embarking on careers that will hopefully pay them enough money to start saving and planning for the future.

Unfortunately, many of them won’t have an idea on how to manage those paychecks.

A retired business executive, Cary Siegel, wrote about the topic in his book, “Why Didn’t They Teach Me This in School? 99 Personal Money Management Principles to Live By.” He drew inspiration from his own experiences. Even after earning an MBA from the University of Chicago, he realized he knew little about how to best manage his personal funds.

Setting financial goals helped him establish some basic principles, a trial-and-error process that was ultimately successful: He retired at age 45 after a marketing and sales career that included introducing new products like Crystal Light and Jell-O Light for Kraft Foods.

“I wished I’d learned these things in school. I would’ve made fewer mistakes,” Siegel said. “My main goal was to retire early enough to spend time with my kids while they were still young, and I was able to do that. It’s not because I’m rich; I’m not! It’s because I learned how to effectively manage my money.”

All high school and college grads should leave school armed with that knowledge, said Siegel. He offered three of his favorite tips:

  • Just say no to credit cards (and don’t get one in college). Credit card companies inundate college students with special offers. They want to hook you early on! But getting hooked on credit cards is as bad as getting hooked on drugs. The more you use them, the easier they are to use, and since you’re not required to pay off the balance each month, you can quickly spiral into debt. You pay for that debt, too. The average interest rate on student credit cards in April was 17.4 percent – which means for every dollar of debt you have, you’re charged almost 18 cents every month.
  • Know what your bills are and take action when they go up. It’s amazing how many people don’t know what they’re paying their service providers each month. (If you don’t know within $5 what each monthly bill is, you’re probably overpaying on many of them.) When your cable, Internet or cell phone company tells you it’s increasing its rates, call the company and ask to speak to a manager or someone in the retention department. Be polite and don’t raise your voice. Ask for detailed rationale for the increase; often, this will immediately stop the increase. If it doesn’t, stress how long you’ve been with the company and your excellent payment history.
  • Spend an hour a week learning about personal finance. Once you start, you’ll find you’re learning so much, you’ll spend more than an hour exploring. Some free resources include the internet and the library. Look for a financially savvy individual, write up a list of questions, and ask if you can interview them. You may not have to look any further for this than your own family. Just one hour a week adds up to a lot of time over a few years: 52 hours your first year, and more than 200 hours during four years of college.

“I’m fairly certain that is more time than 95 percent of other college students spend on learning personal money management,” Siegel said. — Alexandria Echo Press