Financial advice for my former self
This year, our office welcomed a 24-year-old professional into our tight-knit group. Aside from making everyone else in the office feel really, really old, it's been fun and exciting learning what the younger generation is into these days. Let's face it — her life is much more exciting than mine. On weekend evenings when I can be found bathing my kids, making meal plans, and doing laundry, she is usually out on the town. While I spend my free time writing and slaving away at our housework, she is planning fun outings or visiting friends from college. She can stay out until 5:00 a.m. and sleep in until noon if she wants to, and she often does. Hearing her recount all of the fun things she's been doing makes me miss the days when I didn't have so much responsibility.
My new co-worker is also extremely frugal. She makes practical choices and typically buys all of her business clothes second-hand. A thrifty shopper, she frequently uses coupons and doesn't try to impress others with material possessions. In fact, she carries a purse that she bought at the Dollar Store for something like $8. I had no idea that the Dollar Store sold purses and that is exactly what I find impressive; she always finds new and interesting ways to save without sacrificing style or function. To top it off, she is allocating all of her extra money toward repayment of her student loans. I love hearing updates and cheering her on as she aggressively kills off her debt. If only I could've been more like her at her age, I would've been much better off.
Projecting my insecurities
Despite her obvious competency, I still have to stop myself from giving her unsolicited advice. It's not that I think she needs it. On the contrary, I know that she's making great decisions compared to many of her peers. But despite her ability to manage her finances quite well, I want to prevent her from making all of the tragic mistakes that I once made. I can't help but project onto her wishes for my former self when I was 24 years old. If only I had someone around to smack some sense into me, maybe it would't have taken me nearly as long to get my financial act together. There are so many things I should've done differently.
Can you imagine what it would be like to start adulthood over with a clean slate? Since my friend is so financially aware for her age, she has the opportunity to avoid many of the pitfalls and traps that young people entering the job market often fall into. Unfortunately, my twenty-something former self is a perfect example of “what not do do.” There is a plethora of advice I desperately needed in my 20's, and watching her make all of the right decisions has forced me to come to term with my own mistakes. This got me thinking, “What would I tell your former self, if I had the chance?”
Start saving for retirement immediately. Due to the magic of compound interest, it's beneficial for young people to start saving for retirement as soon as possible. I wish I would've started saving immediately so that I wouldn't have to work so hard now to catch up.
Avoid debt like the plague. It's tempting to buy designer clothes or a fancy car when you first start out. When I was her age, I definitely tried to impress others with material possessions I couldn't afford. In my early twenties, I ran up my credit cards too many times to count. Unfortunately, I punished myself this way many times before I matured enough to stop. I wish I would've lived within my means and spared myself the enormous burden of debt in the first place.
You don't need a new car. When I was 23, I financed a $25,000 car that I definitely couldn't afford. While getting a new car proved to be fun and exciting, the payment that came with it became a huge burden. I wish I would've forgone the new car and kept the one I already had.
Live cheaply while you can. Saving as much money as possible before getting married or having children is an ideal way to start off adulthood. Creating your own safety net provides stability and creates peace of mind. I wish I would've lived cheaply while I had the chance. Now that I have a family, I have to work that much harder to save.
Your friends are probably broke. I remember seeing what my friends owned in my early twenties and being really confused. Did they really have that much more money than I did? The reality is that easily available credit makes it nearly effortless to enjoy a lifestyle you can't afford. Now that I'm older and wiser, I realize that the majority of people I know are making payments on most of their stuff. Knowing that fact in my twenties would've explained a lot!
It's stressful knowing that I wasted so many years before getting serious about saving and investing. On the other hand, always looking backward can be counterproductive. Each day presents a new opportunity to make better choices, and I'm proud to be on the path to financial freedom. It's certainly better late than never. And, who knows? If I would've made better choices, my life might be completely different. The thought of a different life is terrifying, and I'm thankful that I had the opportunity to learn so many things firsthand. I'm glad for each lesson, even if I had to learn them the hard way.
The fact is, my co-worker is a smart and sophisticated young lady. She gets to start her adult life with a clean slate, but not everyone has that opportunity. Still, all is not lost. One thing I've learned is that it's never too late to get your financial life in order. After all, mistakes are only insurmountable if you insist on repeating them. I've made my share, and I've moved on. And I know that at this moment, I am exactly where I am supposed to be.
What would you tell your former self, if you had the chance?