As someone that was recently 18 and has been dealing with the transition from young adult to adult, there is a lot that we should know by 18. Most of it isn’t taught in school and not really mentioned anywhere else until it’s an issue that needs to be handled. In today’s post, I will detail major things that we all should know by age 18.
How to manage your time is arguably the most important thing that you should know how by your 18th birthday. Time is something that you cannot get back. Once it is used that’s it. So, learn how to use it wisely. Second, is the importance of understanding compound interest and how money makes more money.
Benjamin Franklin believed this so vehemently that he let his money compound for 200 years. Don’t believe me? Keep reading and learn just how. You will even find some other things you didn’t know you should know by 18.
Know How To Manage Your Time
Learning proper time management is essential to creating and developing a life for yourself. Without good time management skills, you risk allowing yourself to be spread thin, less productive, more forgetful, and potentially open to becoming stagnant if not regressive.
Plus, proper time management skills can help you have a good work/life balance and do more with less time. It can even help you decrease stress levels since you have a better handle on the things that are grabbing your attention.
So, how do you develop time management skills?
Well, it starts with understanding your responsibilities and what is demanded of you each day. From there you can develop a schedule or routine that helps you handle your responsibilities.
Next, it’s all about having the dedication to see the process through and how well you adapt.
As you create your schedule and experiment with what works and what doesn’t, remember that this is all a learning process, and yes at 18 you should have some type of handle on time management, but you do not have to be perfect at it.
If you are interested in learning more about managing your time, especially as a working student, check out this article I wrote on that topic.
Compound Interest Is Your Friend. Try And Make It Your Best Friend.
Albert Einstein calls compound interest the 8th wonder of the world for a reason. Actually, both Einstein and Franklin rave about the power of compound interest plenty of times throughout their lives.
Compound interest is the interest you earn on interest. Interest can be compounded at various periods such as daily, monthly, and yearly.
Benjamin Franklin provides an excellent example of the powers of compound interest and he put his money where his mouth was just to prove how powerful compound interest is.
Check out this excerpt from The Elements of Investing:
When Franklin died in 1790, he left a gift of $5,000 to each of his two favorite cities, Boston and Philadelphia. He stipulated that the money was to be invested and could be paid out at two specific dates, the first 100 years and the second 200 years after the date of the gift. After 100 years, each city was allowed to withdraw $500,000 for public works projects. After 200 years, in 1991, they received the balance—which had compounded to approximately $20 million for each city. Franklin’s example teaches all of us, in a dramatic way, the power of compounding. As Franklin himself liked to describe the benefits of compounding, “Money makes money. And the money that money makes, makes money”
I mean wow. That’s amazing! $5,000 to $20 million is astounding. Now granted this was with 200 years of compounding. Nevertheless, think about what you could accomplish with 40 years of your money working for you if you start at 18 making compound interest work for you.
Know How to Earn and Manage Your Money
Pretty soon, if not already, you are going to be earning more money than you ever have before. Knowing how to manage it and how to grow your earning capabilities is a must-know at 18. At a minimum, you should know how to create and balance a budget. A solid money foundation is of the biggest helpers in setting yourself up for retirement and a more financially free life. The work starts at 18 though.
Some of the most important lessons to know when it comes to managing your money are to live below your means and buy new only if absolutely necessary.
Living below your means as you enter into adulthood helps you keep your costs low as your earning power increases. The beauty in this is that by keeping costs low you give yourself a higher disposable income, or income after all necessities are paid for. With a greater disposable income you can do all types of things like max out your Roth IRA and 401 (k), buy a home, buy a car if needed, and so much more.
If you are interested in learning more about managing your money check out YNAB ( You Need A Budget). It’s the budgeting software that I use and I live by this software. Use my referral link and get a free month to try it out and see what it can do for you.
Experience Is Priceless, Grades Are Just Necessary
Have you ever tried to apply for a job that says it is an entry-level position, but they are asking that you have three years of work experience and a certification that you’ve never heard of?
Yeah, me too.
But hey, you were an Honor Roll student and just received this fancy piece of paper! So why do you need more pieces of paper?
Well, it sucks, but that’s the way it is. Experience is weighted more. We go through our adolescence being told grades are what will get us to the next level. That is not true, our grades can get us to the door, but the experience is what will get us through it.
So, know that keeping good grades is necessary, but gaining experience is where you can truly find ways to add and get value.
By gaining greater experience, you increase your chances of gaining new skills. Those new skills increase your chances of increasing your earning power.
With more earning power, you increase the amount of money that you can bring home. With more money, you can better save for the future and enjoy the present.
It’s all connected and experience is the glue in many regards.
Know How Debit And Credit Cards Work
At 18 you should know how debit and credit cards work. Sadly, this is not taught in school but there are countless outlets, like Life v Lifestyle, out there for you to learn.
In brief, a debit card is really just another form of cash. When you pay for something the money leaves your account just as cash would leave your hand at the register. The difference is exactly that you are not using cash, and nothing is leaving your hand at that moment. The money is instead being sent to the seller electronically.
A credit card on the other hand is like a tab. You buy items, but money does not immediately leave your hand or account as it does with cash or a debit card. Instead, with a credit card, the money becomes a debt that accrues until it is paid. In paying that debt off, that’s when the money now leaves your account.
Now, this is a very brief talk on debit and credit cards. If you are interested in going more in-depth about debit and credit cards there are plenty of online resources to help you understand. I might even do a post about it myself!
Know How To Wash Clothes
It boggles my mind that people do not know how to do this before they turn 18, but I have seen many people wash their clothes wrong. I mean really wrong. Just a quick digression, I once saw someone wash and dry their muddy shoes and bedsheets together. When they pulled out the sheets and shoes from the dryer, their shoes had shrunk and their sheets had dried dirt stains.
Don’t be that person! You are too old!
Like colors should be washed together. Wash your sheets separately. If you are going to wash your shoes let them air dry or do the tumble air fluff/no heat in the dryer.
Know how to wash clothes!
Buying New Is For Show. Buying Used Is The Way To Go.
In reality, very few things in our lives need to be bought new. Underwear, for example, should be bought new. That makes sense. Who wants to wear someone else’s underwear?
A car on the other hand – well that doesn’t need to be bought new. Especially since it’s a depreciable asset – essentially an asset that decreases in value most often until it is only worth its salvage value.
Buying new costs more to get the same thing. If you are buying something, hopefully, you are buying it for its functionality, so if a used item still functions well why you would pay more for the new item?
Putting It All Together
As a newly minted or soon-to-be 18-year-old, these are some of the most important things that you should know by now. So, take the time to let what you just read soak in. Re-read it. Do more research and see what else you can learn. I’ll see you in the next post.
Thanks for reading! If you see any value in this article, please share it with others you think could benefit from reading it. Life v Lifestyle is all about increasing access to the information necessary for us to make the most of these transition years into adulthood. So share the information – help increase access.
About The Author
Donald Williams, Jr.
Donald is an avid believer in helping young people prepare for adulthood. He spends his time working on Adulting Starts Here and helping new adults plan for the future. In his free time, he enjoys spending time with his family and going to the beach.