What I Learned In My First Year of College: Words of Wisdom from Ren Makino, NGPF Intern

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Jul 27, 2017

I have always thought I was pretty good with my finances: I learned a lot going through the NGPF curriculum during my 3 years here. I am also the editor of the “Tim Talks To..” podcast so I have listened to every single financially smart person that joined a podcast with Tim.  

When I turned 18, I had a lot going on with my financial life…

  • Applied for my first credit card 
  • Bought stocks on Robinhood.
  • Closed my Wells Fargo account because they started charging me a fee because I did not have $2,500 in my savings account.
  • Opened an Aspiration Summit checking account which gave me access to every ATM in the world with no fee which was great when traveling
  • Opened an Ally Online Savings Account which has an APY of 1.15% regardless of how much money you have saved.
  • Started budgeting on apps like Mint which has come in handy by giving me the heads-up when bills are due!
  • Started to look into credit card benefits and applied for my second card. This airline credit card has an annual fee of $49 but allowed me to check in a bag for free ($25 value) so if I made a round-trip to school and back, the annual fee would pay for itself.

So by the time I stepped onto my college campus, I thought I was super ready financially. But I was wrong, and here are the problems I encountered:

Problem #1: Depositing Cash

Growing up in the center of Silicon Valley, most of my friends had Venmo (yesterday’s post highlights how Venmo is affecting friendships) and I never had a use for cash. My dad opened my Wells Fargo account for me when I was in 7th grade so I had a debit card to use during middle and high school. For this reason, I always stayed away from holding cash. As a middle schooler with a debit card, I always wanted to flaunt the card and not the cash. So whenever someone gave me cash, I would bike to the Wells Fargo ATM four blocks from my house to deposit it into my account. I am still scared today about holding cash because I am scared I will lose it and it feels safer in my accounts.

But as I mentioned before, I closed my Wells Fargo account and so I did not have a way to deposit cash into my banking accounts. So I am the guy chasing my peers around campus to find someone who would be willing to take my cash and Venmo it back to me, so I can then transfer the money into my bank accounts – effectively turning cash into electronic cash! When I was home and not in school, I was able to ask my dad to Paypal me but my ‘home ATM’, a.k.a Dad, was a country away. So relying on online banks is great with no fees and great benefits but not being able to deposit cash can be a struggle.

Problem #2: Time to Invest

I turned 18 during my second semester of my senior year of high school. I had a lot of time on my hands and I was on Robinhood during class actively buying and selling stocks [Editor’s note: Don’t try this at home or in the classroom; Ren lost $50 and gained an important lesson]. I did not really know what I was doing but I was buying and selling random individual stocks during class and I probably made a decent amount of money, like when I bought Tesla for $200 and sold it for $250. I loved the action.  [Editor’s note: We only remember our winning stock picks!]

As summer started I wasn’t as excited about looking at the Robinhood app and so I sold most of my stock. Fast forward to my third month in college and Vicki Zhou, the Co-CEO of Wisebanyan was featured on the NGPF podcast. This was a game-changer! I was looking into other Robo-investors like Wealthfront but I was not able to put down the minimum $500 they required me to have. Wisebanyan is great in terms of having no-fees and no-minimums so I started my Roth IRA account with them. I originally put $40 in and at this moment I have deposited a total of $1040 which has grown to around $1090 over the past couple of months. I just leave my money in Wisebanyan and have their algorithms do their thing to determine what the right mix of stocks and bonds I should own (right now I’m 91% stocks and 9% bonds): it’s really that simple.  

Problem #3: Reapplying for financial aid

Unfortunately, I did not submit my financial aid application on time. Thanks Dad for bringing this to  my attention! By the time I realized I had not submitted it, I was four months late… Fortunately, after a couple of apology emails and immediately filing my FAFSA, I qualified for the same grants that I received in the prior year. I was honestly waiting for an e-mail to come in my inbox telling me “Ren, you need to reapply for financial aid!” because I knew I had to reapply every year. I was too lazy to check on the college website for due dates but this laziness could have potentially cost me $20,000.

Problem #4: Applying for Too Many Credit Cards

During my last month before I went to college, Sean McQuay from NerdWallet was a guest on the NGPF podcast. He talked about how he has 15 credit cards and I started idolizing him because I would look at my credit score reports from my Discover card and it would always tell me that I have a limited amount of credit lines open. I had a 750+ credit score so I thought I could apply to all these great credit cards without annual fees.

Even though I had a good credit score, I was new to the credit game and my annual salary from my part-time work was under $10,000. Therefore, it was hard for me to get approved. But today I have six credit cards and my wallet does not have space. I also had a problem with being addicted to promotions like ‘spend $1000 within 90 days and get a $200 bonus’. This meant I bought my friends’ textbooks for them and had them had them reimburse me through Venmo. Though this was a great way for me to work towards my $1,000 total, it was challenging to keep track of the amounts I owed on each different credit card and when I had to pay my balances off. Oh, and did I mention that all of these hard inquiries (banks checking my credit) lowered my credit scores by 30 points

Mr. McQuay, please tell me how you deal with 15 credit cards…

Conclusion:

The older you get (yes, I am now 19), the less time you have to manage your finances. Keeping your financial life simple and stress free is the way to go.

About the Author

Ren Makino

Ren is currently a Freshman at Lafayette College in Easton, PA. He plays rugby for his college and enjoys living on the East Coast. Thanks to going through the NGPF curriculum a couple of times, he budgets in college better than his peers. He edits the NGPF podcast and makes sure it is accessible to teachers. You will probably see his name time to time on the NGPF forum where he actively replies to forum posts.