The single life after college is an exciting time for discovery and independence. Careers begin and new friends and lifestyles are made. Dating is just as exciting, but if one isn’t careful, you could fall for the following money mistakes that the single and dating make.
Whether you have already committed one of them, or are proceeding with caution, use these mistakes as speed bumps to learn from. More importantly, check out our recommendations for what to do to avoid making them.
1. Leave the nest right away
Okay, so you’ve been waiting for this moment to assert your independence by starting your new, independent life away from your overprotective father, nagging mother, and annoying sibling. But financially speaking, are you truly ready to set foot away from the comforts of your home?
Have you been saving up enough to pay for your own place? Even if you decide to share with a roommate or a number of roommates, have you considered the space you all will occupy? What are eating arrangements? Who will provide which furniture?
What to do: If you are serious about moving out soon, make a one-year and five-year plan. Make sure you have a job and that you’ve taken into account how much you should set aside in order to achieve it. If you are getting a roommate or roommates, list down what you are looking for, along with non-negotiables.
Check out 6 Money Mistakes Singaporeans in Their 20s Are Making to make sure you are on your way to learning from them.
2. Delay looking into insurance
Another money mistake that the single and dating often make is to ignore everything that seems boring. Insurance usually falls in this category.
What to do: It would be worth your while to take a look at different insurance instruments and start getting used to the jargon. Find a friend or an old classmate in the industry who can help explain things to you. You could even ask your parents or a trusted aunt or uncle to simplify insurance to you and see what they recommend. Read personal finance blogs for more information as well.
3. Avoid thinking about potential partner’s money views and habits
Money is a topic that seems awkward to discuss for the single person who is dating. This mistake doesn’t mean that the solution is to confront your date with his or her financial background.
What to do: Observe how s/he spends or what his/her opinions are about certain financial news. If something does not sit right with you, you might want to reconsider if you and your date are financially compatible after all.
4. Neglect paying off student loans
University graduates tend to think that their student life ends when they have thrown their caps to the sky after the dean congratulates them. But you need to be mindful of any loans you still have, and make sure that you are working towards paying them off.
What to do: Plan how much to set aside monthly to pay off your student loans. Note when you receive monetary gifts or receive work bonuses, and increase the amount you pay accordingly. Remind yourself that you are not as financially independent as you think if you still owe someone something.
5. Spend without planning; plan without doing
The feeling of independence from school and at work can be quite exhilarating. We can deplete our paychecks as soon as we receive them because we feel more financially free to do so. Before you know it, you will not only have spent on things you may realize later on you don’t need and not have saved anything.
What to do: You don’t need to be daunted by high-tech spreadsheets, but if that’s your thing, then, by all means, go for it. Even just noting down in a simple notebook how much salary came in and then first planning where it’s going to go is a big step in stretching your salary to actually go a long way.
6. Commit to a big purchase
The single life often accompanies with it the feeling of a new lease on life, the promise of bigger spending, whether it be a car, an apartment, or more expensive things and hobbies. But be careful of getting fixated on that handbag you’ve been eyeing or the sports car you feel closer to.
What to do: Whether you are planning for an expensive night for your date or wanting that something you’ve been dying to have since university, set aside a small amount at a time. Make sure that you’ve also set aside a little for savings and a little for an emergency.
7. Care about trends too much
It is easy to get sucked into what’s trending nowadays. Whether it’s what’s in the newsfeed or the latest place to go, having something to say about these topics has almost become a necessity.
What to do: Use the trends to help you in your work, but avoid using them in your personal life. That is, unless they really do reflect who you are and how you’d like to spend your time with your date. Ask yourself if you are spending for something just because everyone is into it.
So to the single and dating, it is important that you know your spending habits and goals, and you keep yourself up-to-date with what’s going on financially. That way, you can also get to know the person you’re dating on that level and see how you two fit financially.
For more help on this topic, check out 10 Things Successful People Don’t Waste Money On.