I am nearly 38 years old, and I’ve made my share of (big) financial mistakes in my life. I have learned from every mistake… and my life is finally leaning towards good financial shape.
However, there are a few key things I wish I had known when going out into the real world after high school.
Would I change things? Most likely. I wouldn’t have built a mountain of debt, but then I wouldn’t have met all of you wonderful people. I wouldn’t have been so lackidasical about the importance of building a retirement fund, but now I have more focus in making sure I do secure one. I probably wouldn’t have married so quickly without making sure the financial house is in order, but then I couldn’t be happy that I am celebrating my 4 year anniversary next week.
The important thing these financial mistakes have taught me, it’s important to have a plan for managing your finances to cover today, tomorrow, and the future. I hope that my kids will benefit from the lessons I am learning on this financial journey. And that it may also benefit others reading this list.
And yes, there is a bit of my past conjured up. I have to admit I am ashamed of some of my financial blunders.
- Don’t use a checking account if you don’t have money in it. My parents are a disaster when it comes to finances. I learned to finance like them. Bad, bad, bad. I had my first job working 13 hours a week at Fabric King, opened a checking account, and wrote checks. I quickly learned that if you don’t write down your expenditures in the record log you will quickly learn what compound Overdraft charges are. They cascade and it becomes quite troublesome. Checks are pretty much becoming a thing of the past, but the importance is to make sure you track what you spend.
- How to control impulse spending. This goes along with the first on this list that I have found trouble, impulse spending. I was buying clothes when I didn’t need them. I had to have that Fringe Leather jacket. Buying the shiny new cell phone (that looked like you were carrying a brick in your purse). I had to have it. It depleted my checking account and the aftermath was not pleasant. I finally have learned to curb (most) of my impulse spending. I give at least 24 hours to five days to think about it. Seeing if I have the cash to buy it. Most of the time I don’t end up buying that “got to have it”, because I realize I don’t need it. Learn to control your impulse spending.
- How to plan finances. School’s microeconomics class didn’t do a thing for me. I learned how to balance a checkbook, but I didn’t correlate it with using it in the real world. I wish that I had a mentor in managing finances when growing up. I wish I knew how to save, how to allocate, how to track, how to pay the bill in full each month. I think it is important to find a financial mentor when growing up. Ask questions from reputable sources about how to manage your finances.
- Don’t give into the first credit card offer you receive. Or the next, or the next one after that. If you wait long enough the credit card company will finally give you a card with a very low balance or even a 0% APR. If they don’t then you are not worth to have a credit card yet. My mistake, I did pick up the first offer on several occassions without thought and now those companies are making a killing off of me! I do believe in having at least one credit card for traveling expenses and emergencies. Other than those reasons, don’t touch it!
- Fund my Retirement. And don’t withdrawal it. I lackadaisically thought that I could wait until I was older to start funding my retirement. Then as I got older I kept thinking I could put it off after I got out of this financial mess. There was one excuse after another. Knowing now that (a possible bankrupt) Social Security will not fulfill my retirement lifestyle; it scares me that I may not have enough to hold me in my old age. I didn’t start funding my retirement until I was I was in my early 30s. I have a ways to catch up to my retirement number. Oh, what money I could have invested! Start funding your retirement account when you get your first job or as early as possible.
- All the financial stuff you’re doing that seems hard â€” it will be of use. If you’re reading this blog, then you are probably in a funk. We are working hard to track, save, dig our way out of debt. Even after getting out of debt there is saving and managing further finances. It will be of use. I firmly believe that the great doors of opportunity will start opening for each of us. By slowly setting my debt freeâ€¦ I have learned to see opportunities beyond my scope of focus; like setting up alternative incomes. Keep working at becoming debt free and build your wealth.
I don’t regret all the mistakes I have made. I believe they have made me the stronger person I am today. Plus I have the opportunity to meet some wonderful people along my journey. I know my hard efforts will allow me to blossom my dreams. Don’t give up on your journey. It will be well worth it.
I am curious to knowâ€¦ what financial lessons you wish you had known when starting out in life?