Advice to Graduates (and others) about spending saving money

Good advice for new graduates (and nearly everyone else) from NYT columnist Damon Darlin:

"Over the last two years I’ve been dispensing advice in this space about how to spend and save more wisely. This will be my last column for a spell as I am taking on editing duties that give me little time for reporting. But before I go, I want to remind the young graduates, their parents who scrimped and saved to get them there, and anyone else who stuck with me this far that are a few other rules of life worth considering."

Among them are the following.

• Never pay a real estate agent a 6 percent commission.

• Buy used things, except maybe used tires.

• Get on the do-not-call list and other do-not-solicit lists so you can’t be tempted.

• Watch infomercials for their entertainment value only.

• Know what your credit reports say, but don’t pay for that knowledge: go to to get them.

• Consolidate your cable, phone and Internet service to get the best deal.

• Resist the lunacy of buying premium products like $2,000-a-pound chocolates.

• Lose weight. Carrying extra pounds costs tens of thousands of dollars over a lifetime.

• Do not use your home as a piggy bank if home prices are flat or going down or if interest rates are rising.

• Enroll in a 401(k) at work immediately.

• Find a partner and stay together. Study after study show that two can live more cheaply together than each alone and that divorce is the great destroyer of wealth.

• Postpone buying high-tech products like PCs, digital cameras and high-definition TVs for as long as possible. And then buy after the selling season or buy older technology just as a new technology comes along.

• And, I’m sorry, I’m really serious about this last one: make your own coffee.

I have violated most of these — and regret doing so.


At the original column, there are links to just about every item.


More Advice Graduates Don’t Want to Hear
NYT, June 2, 2007

Print Friendly, PDF & Email

What's been said:

Discussions found on the web:
  1. Larry Nusbaum commented on Jun 10

    Great list, with the exception of “• Enroll in a 401(k) at work immediately.” Great way to save, bad way to invest and too many variables can work against you long term, not the least of which may be the entire plan blowing up or you blowing it up with bad investments, poor timing, too many moves or buying company stock. {Enron}
    I have never like these plans. They are great on paper. But, too much can go wrong.

  2. sunsetbeachguy commented on Jun 10

    TBP has been Nusbaum’ed again:

    You obviously don’t understand 401ks.

    I had a 401k at Enron until after bankruptcy.

    Rolled it over no problem. Still my money.

    Every employer I have worked at since then has had a self-directed option that gave full control over investments.

  3. Larry Nusbaum commented on Jun 10

    Sunset: You obviously don’t understand the performance history of the individual investor:

    According to the Frank Russell and Co, the “manager of managers”, the S&P 500 (10.2%) and the average fund manager (12.2%) has outperformed the average investor (2.7%) over the past 30 years.

  4. me commented on Jun 10

    “bad way to invest and too many variables can work against you long term, ”

    Not sure what you are specifically referring to Larry, but that is about the worst advice I have ever heard given.

    I won’t even address the benefits of tax savings, but
    “bad investments, poor timing, too many moves or buying company stock.”

    I would never advise anyone to buy company stock unless you are Sam Palmisanno and pay nothing for your options and sell them the same day.

    But, the IBM plan is with Hewitt and there are hundreds of choices to place your money, from Pimco, Fidelity, Vanguard, Dodge & cox, and American. That includes bonds, blends, emerging, Europe, Asia, US, small and large cap, growth and income.

    So what are the bad choices or options? You put in everyone month whether the market is up or down.

    That is just horrible advise, and not substantiated at all.

  5. Larry Nusbaum commented on Jun 10

    Btw, once the Enron plan had been transferred to the new plan administrator, and the stock was almost worthless, everyone was free to roll it over. But, way too many had Enron stock in said plan and what they eventually rolled over was worth a fraction of what it could have been had they stayed away from company stock.

  6. Larry Nusbaum commented on Jun 10

    “I would never advise anyone to buy company stock” I am in 100% agreement. No one should be allowed to buy company stock in their 401K………….

  7. Larry Nusbaum commented on Jun 10

    me: I don’t give stock market investment “advice”, btw.

  8. PeakVT commented on Jun 10

    “And, I’m sorry, I’m really serious about this last one: make your own coffee.”

    But if you make your own coffee you can’t carry around that round, green status symbol – the one that says “I’m so rich I can pay $5/cup (or about $40/gal) for something that tastes like burnt water.”

    And people complain about the price of gas.

  9. Craig commented on Jun 10

    Actually you can get it for about $3.50 a pint, (say a 16 oz mocha with an extra shot) which is still a lot to pay for the mermaid, but not quite $40 a gallon. $28 is plenty.

    Truly, make your own. Done properly all of these are good advice.

  10. me commented on Jun 10

    “me: I don’t give stock market investment “advice”, btw.”

    You really have no idea what you are talking about. Are you aware that in January, at IBM the only “pension” money you get is the company match in the 401K? I didn’t think so, which makes your “advice” or whatever YOU call it pure bullshit.

    And notcie, Nussbaum still hasn’t told them what to do with their moeny has he?

  11. Larry Nusbaum commented on Jun 10

    “Are you aware that in January, at IBM the only “pension” money you get is the company match in the 401K?”

    Yes. True at Wells Fargo and many other organizations. But, if that’s the (free) matching portion, then it’s not “buying” now is it?

    1. ” or buying company stock. {Enron}”
    2. “I am in 100% agreement. No one should be allowed to buy company stock in their 401K.”

  12. babygal commented on Jun 10

    Great advice-I quoted that column to my husband a few days ago while we were doing our daily walk to keep the lbs off.

  13. Winston Munn commented on Jun 10

    For those outside the top 5%, a matching 401K is the only hope of having anything at retirement. It’s hard to argue with a 100% annual return (when you have an equal company match), and in most of these products conservative investment options are offered.

    I agree with Larry Nusbaum in that there is a significant difference between an “investement” vehicle and a “savings” vehicle, and that a 401K is not designed for investment purposes, i.e., speculation.

    The object of the 401K is more in line with Will Rogers’s theory: “I’m more concerned with the return OF my money than the return ON my money.”

  14. Lone commented on Jun 10

    Quit drinking should be added to that as well.

    I recently calculated that my drinking problem/habit was costing me in excess of $200 a month.

    Nothing like crunching numbers to cure you of alcoholism.

  15. anon commented on Jun 10


    $200 a month? That’s a hobby, not a problem.

    I spend 6x that on drinks and cigs.

  16. Monetizin’ the Debt commented on Jun 10

    Ha Ha,

    You’ve been Nussbaumed.

    Dude, you are the internet’s biggest d-bag.

    I pray to God noone listens to your advice.

    Monetizin’ the Debt

  17. wunsacon commented on Jun 10

    Don’t be hatin’.

  18. V L commented on Jun 10

    “make your own coffee”

    It is hard for me to imagine now that I used to poison my body with Starbucks’ burned cheap beans coffee in the past.

    Nowadays, you would have to pay me a lot of money for me to drink Starbucks’ coffee.
    For those who still buys and drinks poison from Starbucks, buy a fully automatic (I have DeLonghi Magnifica both in my office and home) espresso maker and pure Hawaiian Kona coffee beans (buy it over the internet) and enjoy the best coffee that this mother earth has to offer (not to mention saving a ton of money)

    Warning! After you try authentic Hawaiian Kona beans you will not be able to drink any other coffee. (Kona beans are absolutely second to none, the best in the world coffee.)

  19. me commented on Jun 11


  20. Marc-Andre Belair commented on Jun 11

    Hey, thanks for the great heads up and awesome tips. I’ve added them to my own blog.


    Marc-André Bélair
    Financial Planner

  21. Brendan commented on Jun 11

    Being about 5 years detached from college and learning some of this the hard way, I have to agree with pretty much this entire list. Contrary to what another poster said, 401Ks are a great idea because they generally have matching, which makes the investment unbeatable. Because of all that free money – even being a bit more fee-heavy – my 401K is killing my other investments. And the bite out of my disposable income is about the same.

    Regarding the “find a partner” part; for recent grads I think I might disagree. “Find a roommate” would be better advise. The savings are still substantial and the divorces are almost always much cheaper and less messy. In this day and age, there’s way too much temptation out there for an 18/22 year old to expect that they can make a marriage work without first “experiencing the world on his/her own.” Plus a lot of your development regarding world views happens during the period between 20 and 25, so it may be a bit pre-mature to decide who you want to be with before this age has passed. I can say this is true from personal experience, being in a 3-year relationship from 23 to 26. Everyone kept asking us when we were going to get married. We grew apart as our views on things did. So, sorry, I don’t think this is good advice. My advice: live with a roommate for 4 or 5 years until you figure out who you want to be with.

    Making your own coffee is a great plan too. I’d suggest something more like a Rancilio Silvia, rather than the super-automatic suggested by another poster. While those are nice, they won’t save you any money for a long-long time with the $2000+ initial investment. For us non CEOs, for 1/4 of the price, you can make an equally good cup of coffee with just a little more effort (which will make you appreciate the coffee more, anyway). Kona and Jamaican Blue are good choices for beans.

    Oh, one more thing to add to the list:

    -DON’T get a whole life insurance policy. The numbers just don’t add up except on the sheets that they show you to sell them. These things suck (fees from your pocket) in real life. This is the biggest financial mistake of my life. Luckily I figured it out rather quickly and my mistake only cost me a few grand. I guess I could have had that super-automatic espresso machine after-all.

    Just my 1 pence (since that’s all two cents is worth any more).

Posted Under