I always did well in my studies (cough, except math) and far exceeded in the area of common sense. One arena I did struggle in however, was a lesson I wasn’t taught by a book or from my parents. Finance, unfortunately, was learned in the school of hard knocks.

I have a mortgage, but not the kind of mortgage that gets you swept through the threshold or one that gets you a house warming party. Instead, I consider my student loans a form of mortgage—and yes there will be a celebration party, but at the end of the duration. Because I wasn’t classified as needing government assistance and was looking at paying for the whole tamale myself, I found myself in that awkward situation—the 11 year-old who isn’t quite ready for junior wear but too big for Osh Gosh. I was forced to take out private loans myself with twice the interest rate as my fellow classmates.

Lesson One) Interest rates matter. My 6.5% student loan rate will end up costing me the equivalent to what could have been another year of education. I can’t stress enough the importance of shopping around for a better rate. If you have a Visa card with an 18% rate and you’re not paying it off every month—PAY IT OFF. I don’t recommend tossing the card, as that could actually hurt your credit as well, but at least call up your provider and see if they can do anything about lowering the rate for you.

Lesson Two) Don’t have store type credit cards. I used to think my Victoria’s Secret credit card and Paypal card were the greatest thing since sliced bread—moldy carb-infested bread. Having multiple store credit lines (think Target, Best Buy, etc) will actually hurt you in the long-run. If you’re looking to build credit, simply open the standard type Visa or American Express, but again, look at the interest rates. Banana Republic might offer you 10% off your purchase if you open a card, but is saving $6.74 on a few sweaters and a pair of flats really worth hurting your credit for the next ten years?

Lesson Three) Save for retirement. This might be the most important financial tip I can give, and one of the biggest problems our government shall face in the upcoming years. Not saving for retirement, and starting early at that, will cripple your financial future. Americans are living longer and our generation will be the first to live well into their hundreds. If you are planning to retire at 65 (or if you’re like me, 45) seriously consider what it is going to take to create the amount of wealth for you to live comfortably for 40 years. Are you doing the math in your head? Odds are you are falling a little short. So do yourself a favor while you can and SAVE. If your employer is offering a match and you are not taking advantage of it then you are a fool. SAVE and then SAVE some more.

Lesson Four) The 401(k) is only as good as the employer match. If you are taking advantage of your employer’s retirement plan and they are nice enough to give you a little extra something then wonderful—you are a lucky soul, take full advantage of it. BUT, if you’re aimlessly putting money into a 401(k) above and beyond what an employer is giving you, you might want to consider speaking with a financial advisor. The 401(k), along with other government qualified plans, have limitations that many other types of investment vehicles do not. For instance, if you’ve been contributing to an IRA for 15 years (let’s say you’ve amassed $70k for this example’s sake) and then BOOM, your car gets struck by lightning. You need emergency cash and you decide to take $40k out of your IRA to purchase a new SUV….Uh oh. You’re going to get nailed with a 10% penalty for withdrawing the government’s money (yes, the government’s money) pre-maturely. One cannot withdraw money from an IRA prior to age 59 ½ without a 10% penalty. That is just one of many limitations you’ll face with an IRA account. In today’s world, there are so many types of investment opportunities (with an array of risk allocation and yield averages) that you should not limit yourself to just an IRA plan. Diversify.

Lesson Five) ROTH it, ROTH it good. If you are going to set up an IRA, might I suggest that Roth is the way to go. With a Roth, you will have to pay taxes on the money upfront (not deferred like a regular IRA) so I know what you’re immediately thinking…Why pay a tax today when I can pay it tomorrow. My rebuttal to that statement: why not pay a low tax now instead of paying a high tax later. Contrary to belief, we are at one of the lowest tax rates in history, and I like many, believe that taxes are only going one way… UP. So if you’re like me, and you too believe taxes are going up, why not pay the lower amount now opposed to the ridiculous rates we’re going to see in the future? *Note: If you’re contemplating a Roth conversion, seek guidance from your accountant first!

Although I’ve hit a few financial bumps in the road, I’ve luckily been blessed with a good job, ambition and a support system that has encouraged me to become financially savvy and dig myself out of my one-time hole. It doesn’t take much to stay on top of your finances, but it doesn’t take much to fall either. The key is to stay on top of it…and not buy too many shoes. I encourage all of you to never stop learning about how you can improve your individual situation. With that said, I also encourage all of you to donate to my “mortgage.”  It’s for a great financial cause after all. Wink-wink.