Financial Advice to My 20-Something Year-Old Self

My friend Holly and I used to gchat a lot about what we would do if we were billionaires. Her answer was to gather up all the gun owners in Texas and fly them out to sex trafficking hotspots to carry out vigilante justice. My answer was to go into all the failing small businesses, buy up their inventory, then donate it to shelters for abused women, and to military families. Then we would say, "That was a good Tuesday, let's go grab dinner." Etc.

Part of getting older is realizing that the "If I were a billionaire"-related scenarios that I thought up in my youth will (probably) never happen. That I am nowhere close. And that even in small, mediocre ways, I missed a lot of opportunities in my twenties that would have been very helpful later in life, financially speaking.

Any financial blessing I currently have is due to God's mercy, the generosity (to the point of enabling?) of the parents, family (including in-laws) and friends I inherited as life has gone on, and the fact that M and I are both too lazy to be spendthrifts. I wish I could point to a bunch of evidence of my own financial prudence in my twenties, but I can't. I was, as so many young people are, simply someone who took her circumstances for granted.

Anyway. I have it pretty good, but I do have a ready list of things I would tell my younger self, if I could go back. In order of priority, here they are:

1) Learn generosity early. When I was young and working in minor league baseball, every dollar felt like the difference between eating and not eating. Every fixed cost (rent, transportation, etc.) felt like a matter of survival. "I'm giving what I can afford to give," I thought, when I would hand over a pitifully small tithe on an infrequent basis. In retrospect, I would pound into my own head that my money is God's money, so learn to give it away as instructed in the Bible, as it teaches trust, sacrificial love, and budgeting. Then I'd get a roommate and make more sandwiches.

2) Don't make snap decisions. I don't know why, but I am not in the habit of exploring and evaluating my options. I love making decisions quickly, even bad ones, if only to get them over with and move on in life. I am thankful, in retrospect, for every opportunity I was given, but I know that I made the following decisions in my twenties very, very quickly, without thinking: college major, career, where to live, furniture and clothing purchases, the list goes on. It is a list riddled with both blessings and regret, and to minimize the regret, all I had to do at the time was maybe take more than a few minutes to evaluate a decision before sealing my own fate.

3) Learn to be grateful. My current self is phenomenally good at identifying things to complain about (or, as I tell myself, "things that are unnecessarily sub-optimal"). I'm working on this, but I wish I'd started the habit early of naming people and things I'm grateful for. It probably would have helped protect me from emotional splurges, like that 200-euro leather jacket I bought in Germany when I was twenty-four, that is now in my parents' coat closet, unused by anyone.

4) Automate savings. Every financial expert tells us to do this. There is no downside to building an emergency cash fund and preventing a debt spiral. Even in my past, "but seriously, I have NO money" days, I wish I'd gotten in the habit of saving even a tiny amount of money automatically, and then ideally increasing that amount over time and adding larger surpluses whenever I could. Also, I wish I'd been more acutely aware that being broke never was, and never will be, cute.

Poignant, to-the-point photo courtesy of Flickr

5) Open a Vanguard account and start investing in index funds. For a twenty-something who didn't know how to invest--I still don't--this would have been the easiest option to start taking advantage of compound interest, with any extra cash lying around (see #4). The series in this blog post was a fun little read for me. The principles outlined here would have been great as a starting point when I was in my twenties. (As a caveat, I ideally would have started doing this post-2008 market crash.) Those years to take advantage of compound interest are gone now, and if I were acting alone, I'd have to work twice as hard to make it up.

6) Remember that whatever financial burdens you decide not to take care of, is a burden to someone else. Every moment we are financially dependent on someone else, we drain their resources. It might be our family, or our friends, or a collective body of taxpayers. In my twenties, I'm pretty sure I subconsciously thought of my parents as a safety net. If I'd thought about the fact that THEY don't have a money-growing tree either, I'd have worked harder to build the financial cushions around myself to be completely independent. Maybe learned a new skill and taken on freelance work in my spare time. Maybe automated savings. Maybe used more negotiation tactics on my car. I dunno. The list of alternative options is endless. It was tempting to think of my parents as the ones who would take care of me forever, but that's probably why people think our generation has been slow to grow up.

Again, I can't say I regret where life has taken me. After all, it led me to a man who has always saved diligently for retirement and who prioritizes providing for his household. And we were both blessed to enter marriage with no debt, besides the mortgage on my townhouse. But if I had followed my own advice above, I would have had that much more to contribute to our marriage. And I can't get that time back.