Kris called me at seven o’clock last night, just as I was sitting down to write the Friday “Ask the Readers” post. I was sorting through this week’s questions when the phone rang.

“Are you busy?” she asked. “Can you do me favor?”

“Maybe,” I said. “It depends on what it is.”

“Ryan’s car broke down,” Kris said. “He’s stranded here at the lab and can’t get home. Can you give him a ride across town?”

“Sure,” I said. But I did the mental math: The trip would take me a couple of hours. Because I hadn’t yet started on the morning’s post, I knew I’d be up late.

I drove to Kris’ office to pick up Ryan. Ryan’s a young man, just out of college. He did some temp work in the construction industry before getting a job as a scientist. He and his girlfriend are getting married in two weeks. They just rented a house together and are supposed to have moved out of their apartment by tomorrow. With Ryan’s car in the shop, that’s going to be difficult.

“What kind of work do you do?” Ryan asked as we drove across Portland to Beaverton.

“I’m a professional blogger,” I said. “I write a blog about money.”

“Stocks and bonds and stuff like that?” he asked.

“A little,” I said. “I do cover the details, but a lot of the time I write about the mental aspect of money. I’m interested in the psychology, in the behavioral side of personal finance. I don’t know how your money skills are, but mine weren’t very good when I was young, and that’s mostly because I had bad habits.”

“I’m lucky, I guess,” said Ryan. “My parents taught me about money, so I try to do the right thing, like avoid credit card debt. I try to.” From the way he said it, I thought that the whole car repair/wedding/renting a new house combination might be taxing his reserves.

“Thanks for the ride,” Ryan said as we pulled into the apartment complex.

“No problem,” I said. “I’m happy to do it. People have done the same for me in the past. It’s my turn to pay it forward.”

As I drive home — windows down, the Mini’s sunroof open, listening to 80s synthpop — I thought about what it was like when Kris and I were starting out. I remembered what it felt like to go through the motions of adult life, hoping that I was doing things the right way. “It’s too bad I didn’t have an instruction manual,” I thought.

But what would an instruction manual for personal finance contain? What would have helped me most when I was starting out? What would help me most now? Instructions for how to invest? A list of steps for buying a house? Tips for avoiding overdraft fees? Or would I have profited from the more psychological stuff — like how to deal with failure?

At stoplights, I jotted down a list of the five things I really wish I had known when I was younger:

  • Why it’s important to pay yourself first. My father tried to tell me this when I was nineteen, but I just wasn’t ready to listen. Now, after having watched Kris sock away up to 25% of every paycheck for the past decade, I understand how important it is to set aside savings — for vacations, for home-buying, for retirement — before doing anything else with your income.

  • How to harness the power of compounding. I wish somebody had shown me a chart demonstrating the difference between paying a credit card company 18.9% interest on $10,000 versus a bank paying me 3% interest on the same amount.

  • How to avoid the seductive trap of lifestyle inflation. As my income grew, so did my spending. In fact, my spending grew faster than my income. It never occurred to me that I ought to save this money. And it took me years to understand that most of the Stuff I was buying would end up gathering dust after very little use.

  • How to avoid the chains of debt. Debt is slavery. The less you spend, the more flexibility you have. Because I developed debt early and quickly, my choices were limited. I had to take any job I could because I was tied to the monthly payments. And then, once I’d recognized the error of my ways, it took years to break the chains that bound me.

  • How to save on things both big and small. My friend Ramit seems convinced that small frugality doesn’t matter. I disagree. I’ve never really had a problem saving on the big stuff. I research the hell out of most expenses over $500. It’s the small stuff that has killed me, and that’s largely because I thought it didn’t matter. The small stuff does matter. If I’d known that sooner, I could have avoided a lot of pain.

“What do you wish you’d known about money when you were younger?” I asked Kris when I got home.

“Well, I never really had a problem with spending or with debt,” she said. She thought for a moment. “I wish I had known to pay myself first, even when I couldn’t afford to save very much.” (This coming from a woman who saves a quarter of everything she earns!)

I get the sense that Ryan will do just fine. He has a good head on his shoulders. He’s being careful, even in the face of so many financial stressors. I just wonder what he’ll be thinking fifteen years from now, when he’s my age.

What do you wish you had known about money when you were younger?

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