Although I am often asked to speak to recent grads, I have never been asked to speak at any graduations. But if I were, I imagine I would deliver something along the lines of this speech.

Today is part 3. To see the entire speech released so far, click here and read from the bottom up.

Rule 2. Don’t be cheap, be fiscally responsible.

Personally, I follow 10 simple saving strategies. I recommend you learn them all one day, but you’ve got parties to get to this afternoon. So I’ll just share one saving strategy with you now: Major on the major, minor on the minor.

Many financial experts feel that the problems of the world (and especially of young people) would instantly disappear if we could only get rid of our coffee shops.

Look, if you’re going to Starbucks five times a day, spending $100+ a week there, you’ve got problems. But your money problem isn’t the first one to address. (FYI, it’s called an addiction.) Of course, most people don’t use Starbucks that way, and so what the financial talking heads miss is that nobody—not even the most coffee-addicted person you know—is going to find ten grand a year by pinching pennies at Starbucks.

Instead, you’ve got to put major focus on major expenses, like your housing and car choices. The typical underpaid twenty-something simply can’t live on the same block as the manager two levels up from her or drive the car her boss drives. Not yet. When you commit to high housing or car expenses, you pay them for a long time. Therefore, that’s where you want to put most of your financial energy and discipline. Remember: just because someone will sell you something doesn’t mean you can afford it.

Still, day-to-day spending can make a difference, so it’s important to stay emotionally connected to your money. Most working adults have no idea how much cash they have in their wallets until they find themselves at a place that has the audacity not to accept credit cards. This disconnection matters because when you’re emotionally separated from your money, you spend more. Spending cash hurts—right away. Using credit cards is painless—until you get the bill.

Use cash as your primary source of day-to-day spending. When you see two options for something you need, one at $55 which is “good enough” and another at $89 that is “better,” spending cash means you’ll likely take the one for $55. Handing over three twenties to the cashier feels a lot better than saying goodbye to five of them.

By prioritizing what really matters to you, constant budgeting isn’t required. The beauty of following the saving strategies is that you save so much you don’t need to micromanage your finances. Budgeting can limit your desire for spontaneity, making it hard to keep at it. But you can get away without budgeting entirely if you simply commit to saving. After all, if you’re putting away 15 percent of your income, what’s the difference how you spend the other 85 percent?

The key is not to begin cutting all of your discretionary spending. Instead, you need to find a way to spend on the items you value the most. If it’s coffee, pull up a chair and enjoy. But if it’s not, simply keep walking.

The kinesiology major could probably tell you that walking is good for your future anyway.

On the other hand, those who studied American Culture could tell you that many years ago, another individual speaking to a new graduate spoke of the future importance of “plastics.” Turns out he was very close, but overshot. By just one letter. The right term is “plastic.” You probably already have at least one version of those 3.5” by 2” little pieces of plastic in your wallet with one of several possible bank logos on it, the card you got for “free” along with a “free” tee-shirt or “free” pizza. Maybe Mr. McGuire knew you’d have several credit cards, not just one, so that’s why he used the plural version. But either way,
[To be continued]

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