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Young adults starting their financial lives.

‘Tis the bewitching season, and it seems there are plenty of ghosts and goblins out there for those just starting out on their own. Perhaps you’re a millennial who just finished college, or you’ve finally found a job that lets you live on your own. Either way, making one’s own way can be daunting. So we offer a few words of warning, and you’d do well to heed them, as they could help stop you from derailing your new independent life.

Find out now: What card is best for me?

Creepy Credit Card Offers

A recent survey found that 63% of young adults ages 18-29 do not have a credit card, and that 35% of adults 30 and older do not use any, either. The reasons run the gamut from changes in credit card laws that make it more difficult for someone under 21 to get a card, to young people who just don’t want to be saddled with debt they will likely not be able to pay off for years.

And there’s good reason for them to think so. A study last year by the Ohio State University found that millennials born between 1980 and 1984 already have an average of $5,689 more in credit card debt than their parents did at their age.

Yet while surveys show a steady decline in credit card use since the recession, the offers are still be coming in, especially for recent grads. We receive at least three every week addressed to our daughter who is away at college. Our advice to her is to learn from our youthful (and not-so-youthful) mistakes, and opt to “pay as you go” instead of relying on credit.

4 Money Mistakes Every Millennial Needs to Avoid

Emergency Cash Loans

Credit card use may be decreasing among those starting out in life, but many are making up for it with the use of so-called emergency cash loans, such as payday and cash advance loans. A ThinkFinance.com survey of a thousand people ages 18-34 found that while 92% used a bank, 45% said they also used outside services.

The same study found that 22% of those using emergency cash loans made more than $50,00 dollars a year, while 15% made less than $25,000. Our “Buyer Beware” message is that the devil is in the details. Make sure you know the interest rate if you can’t pay it back on time. Also, be aware that many companies may get you to sign an authorization allowing them to withdraw money from your bank account at will.

New Car Purchase

You get that first job related to your major and you’re pulling in big bucks compared to your college jobs. What is the first thing most new grads then do? You guessed it: go out and get a new car.Here is something to consider, though: depreciation.

You hear it all the time. I recently saw a great illustration that showed a car that was bought for $29,000 depreciated in value by $2,500 within the first minute of being driven off the lot. There are, of course, unknown variables, but the obvious ones are that you are putting miles on it and it will soon be in need of maintenance and repair.

5 Types of Insurance Millennials Need to Have

If you are someone who “rides til the wheels fall off,” buying a new car may still be the way to go. But if you plan on trading in your car as you move up the corporate ladder, be sure to look for alternatives. Use a car depreciation calculator and research to find out which cars depreciate the most and which best hold their value, as you could find yourself upside down on your car loan should your job situation change.

School Loan Default

Get this staggering statistic: in fiscal year 2014, students borrowed approximately $100 billion through federal loan programs. The frightening thing is that millions of them will simply never pay it back. There are currently $98.1 billion worth of loans that are outstanding.

The government has made some major changes to address this issue, including requiring loan companies to work with those in default to get them back in good stead. Do not think that you can forget about your loans, though. The debt will follow and cripple you financially your entire adult life until it is paid.

Fast Food Frenzy

Most students went from having Mom or Dad’s cooking every day to college cafeteria food. This, of course, contributed to the fast food frenzy. The problem, though, is that many young adults stay on the fast food plan whether they can afford it or not.

Eating out, however, will eat up your disposable cash in no time. My advice is to learn to cook something that can be prepared even in a microwave, if possible. Make sure you have some staples in your apartment at all times–peanut butter, crackers, jelly, rice, beans, onions and celery, to name a few.

Find out now: Can I afford my student loan payments?

My husband has told our children in the past, “You want to be grown, but don’t want to grow up.” We all laugh, but it is so true. Starting out in your independent life requires some adult decision-making. You can do it. You may have to give up a few treats, but you can still have a great life by using these tricks of the trade.

Photo credit: flickr

Tonya McCleary Tonya McCleary is a veteran TV journalist and manager, talent coach, managing editor for Exhale for Women Empowerment Magazine and author of "How to Get Your Kid in College and Live to Tell the Tale." She is an expert in financing higher education and saving on college costs. Tonya is also the owner of Tri M Media Marketing Maven LLC, providing crisis management and media-readiness coaching to businesses and athletes. For more info: www.MediaMarketingMaven.com.
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