What Financial Advice Would I Give My Younger Self?
If you had the chance to offer your younger self a piece of financial wisdom, what would it be? It’s an intriguing question, one that taps into lessons learned, mistakes made, and experiences gained. We asked our community for their thoughts, and their responses were both insightful and practical. Whether you’re just starting out or looking to improve your financial journey, the advice shared can provide a fresh perspective on how to handle money wisely.
Start Saving Early—and Often
One of the most common pieces of advice we received was to start saving early, even if it’s a small amount. Compound interest is often referred to as the eighth wonder of the world, and it’s no surprise why. The earlier you begin saving, the more time your money has to grow. Even saving just a small amount, like $1 a week, can accumulate into significant wealth over time.
Opening a savings account by the time you’re 15 or 16, and depositing a portion of every paycheck into it, can set the foundation for future financial success. Setting up automatic savings ensures that money is consistently put aside without you needing to think about it. Before you know it, you’ll have a healthy emergency fund to fall back on.
The Importance of Living Below Your Means
Another piece of timeless advice that stood out was to live on half of your income—or as close to it as possible. This might sound extreme at first, but the concept behind it is simple: by limiting your spending, you create a cushion that can be used for savings, investments, or paying off debt. It’s not about depriving yourself; rather, it’s about making conscious choices that allow you to build a more stable financial future.
Additionally, resisting the urge to buy things you don’t need is a powerful tool in financial planning. Often, we accumulate unnecessary items, only to later realize that they serve no purpose in our lives. The key is to be mindful of your purchases and ask yourself, “Do I really need this?” before reaching for your wallet.
Be Smart About Credit and Debt
Debt is a major concern for many young people, especially when it comes to student loans, credit cards, and auto loans. Several community members shared their regrets about taking on debt early in life. Avoiding unnecessary debt is one of the best financial decisions you can make. For example, opting for a state school instead of a private institution can significantly reduce the burden of student loans. It’s important to think critically about taking on debt—don’t finance anything except for your home.
If you do have debt, consider paying off the principal on your mortgage or credit cards every month. Making extra payments accelerates your path to becoming debt-free, which opens up more opportunities for saving and investing.
The Power of Investing Early
Many respondents emphasized the importance of investing early, regardless of how small the contributions might seem. Even something as modest as $10 a month into an IRA (Individual Retirement Account) can grow over time with compounding interest. The key is consistency, not the amount.
If you’re unsure where to start, seeking advice from a financial advisor can help you make informed decisions. They can guide you on things like stocks, mutual funds, or real estate investments that can build wealth for the long term. For those with kids, saving for college early using a 529 account is a great way to avoid the heavy burden of educational expenses later on.
Live Simply and Avoid the Trap of “Keeping Up With the Joneses”
The desire to keep up with others is a trap that many fall into, especially in the age of social media and constant comparisons. A few pieces of advice we received touched on the importance of living simply and not letting the desire for luxury possessions control your spending. Don’t buy a fancy car or luxury items just because others do—focus instead on your goals and what truly adds value to your life. As one respondent put it, “Nobody cares about what vehicle you drive”—what matters is your financial security.
Living simply doesn’t mean you can’t enjoy life; it simply means making more intentional choices about where your money goes. Instead of spending on unnecessary things, put your money toward experiences or activities that enrich your life without the price tag.
Stay Educated and Keep Learning
Understanding financial concepts like stocks, bonds, and investment strategies is crucial for making informed decisions. The more you learn about personal finance, the better prepared you’ll be to navigate the complexities of managing money. Even something as basic as learning about certificates of deposit (CDs) or the principles of mutual funds can help you grow your wealth responsibly.
Additionally, don’t be afraid to learn from your mistakes. If you make a bad financial decision, take note of what went wrong and use it as a stepping stone for future growth. Everyone makes mistakes, but those who grow from them are the ones who truly succeed.
Make Thoughtful Choices, But Don’t Forget to Enjoy Life
Finally, perhaps the most heartfelt advice shared was to make sure you enjoy your money while you have it. It’s easy to get caught up in the idea of saving for a future that may or may not come, but it’s also essential to live in the present. Remember that “someday” might never arrive, and you can’t take your money with you. That doesn’t mean blowing all your savings, but rather finding a balance between planning for the future and enjoying the present moment.
Final Thoughts
If we could go back and give our younger selves one piece of financial advice, it would likely echo much of what we’ve shared here: save early, live below your means, avoid unnecessary debt, and invest in your future. Financial freedom doesn’t come overnight, but with patience, discipline, and a little bit of guidance, it’s entirely achievable.
So, what advice would you give your younger self? Share your thoughts and lessons learned—there’s always room for more wisdom in this financial journey.