When I was younger, I was sure I knew everything. Sometimes I still fall back into that mode and then something happens to prove (usually quickly) how stupid that thought is. However, if you’ll let it, experience and age bring wisdom and knowledge that just can’t be taught any other way. That’s the premise for this post.
I have been privileged to hire an intern at work. She is young – 18 – and VERY intelligent, but during one of our discussions, her comments reminded me that all the education in the world can’t beat out some good experience when it comes to learning about personal finance. With that in mind, I compiled a list of 10 things I wish someone would have taught me when I was 18 and things I will convey to her – even though they have nothing to do with her assigned job duties. I will admit many of them are not directly about money, but I included them because they had a very powerful impact on my financial life.
Life Isn’t Fair – and it Isn’t Supposed to Be
People will be hired, promoted and paid more than you without good reason. You’ll be wronged, cheated and maybe even hurt. Learn from these experiences and be bettered because of them.
I don’t believe in using people to get what you want and people who do that usually destroy relationships. Instead, build strong relationships and then when you get the chance to benefit yourself AND the relationship, take all those opportunities that present themselves.
Be Grateful in All Things
“…for I have learned to be content whatever the circumstances. I know what it is to be in need, and I know what it is to have plenty. I have learned the secret of being content in any and every situation, whether well fed or hungry, whether living in plenty or in want” (Philippians 4:11b-12). When things are going well and when they aren’t, God is still good and each breath we take is one we didn’t have to be granted.
I meet too many people who live in a pipe dream. While you should always be dreaming, a good dose of reality is pretty darn important. That’s why I preach so hard about living on a budget – it puts your financial reality on paper and makes you look at it and make choices and priorities.
Ignore Your Credit Score (and those who judge you by it)
I got my first credit card when I was 18 to “build my credit”. That’s stupid. If you don’t want to go into debt, you don’t need a good credit score. If you pay your expenses on time, live within your means and stay out of trouble, your credit score will take care of itself. If someone judges you solely by your credit score, might I suggest these people are morons? It is like judging someone’s ability to be a good employee by looking ONLY at their high school report card. It may matter, but it probably doesn’t.
Invest in What Matters
Less than a year ago, my dad was killed suddenly in a horrible car accident. Want to know the last thing I did with him? I celebrated my daughter’s 3rd birthday. The last photo of him is Annie on his lap blowing out candles. Priceless. Work is important, but invest your time, energy and money in what has lasting value.
Gosh I needed this one at 18. If I would have saved then like I am now, I could be retired by 40 (I’m not joking – I’ve done the math). There is no good reason a recent graduate needs to live in a good neighborhood, drive a nice car and have all new stuff. Be cheap for the first five years after you graduate from college and it can make literally millions of dollars’ worth of difference.
Learn How to Plan for Retirement – and Actually Do It!
Don’t know what a 401k is? Clueless about the difference in a Roth and Traditional IRA? Head spin when I mention the term aggressive growth mutual fund? Shame on you. If you will endure the pain of learning how these things work and then develop a plan for your retirement, you will be financially able to retire earlier, be secure in your financial plan, and avoid being duped by the scoundrels out there who want to hock their latest financial “opportunity” on you.
This doesn’t mean “go crazy and get arrested.” This means do things that are a little scary but will stretch you a bit. Learn new things, meet new people, go new places. Say “yes” to opportunities that you won’t get later.
Listen to Advice, then Make Up Your Own Mind
God didn’t make us all the same. He gave us unique personalities, viewpoints and perspectives so we would be able to think for ourselves. Apparently in Washington DC there is some device that vaporizes this portion of the human brain. Unless you want to act like the people who run our country, form your own opinions! Be able to defend those opinions and force someone who wants to challenge you to be able to defend their opinions too! There is too much rhetoric and not enough intelligence in our world.
Well, that’s my Top 10. I could have probably come up with at least ten times that many, but I thought I’d leave some for you. What are some of the money tips you wish someone would have told you ten years ago?