If only we could turn back the hands of time and start over with our money decisions, we would. 

But we can’t. What we can do is make better decisions today and inform the next generation. This way they can make the right money moves early and often.

I was reading a Facebook post recently that asked people, based on what they know now, what they would tell their younger selves about money.

The responses were pretty good so I thought I would share.

Money Management

It doesn’t matter how much you make if you do not know how to manage it. 

I 100 percent agree with this advice. And this advice is not for a specific income level.  It is for all income brackets because living paycheck to paycheck does not discriminate. Many people believe that if they just make more money all will be well and yet the cycle will repeat itself. Why is that? Because your habits will show up at every level. Your habits determine what will happen with your money. 

Money management is the key to building lasting wealth but it is often overlooked and under appreciated. This is because either you feel like you don’t have enough to manage or you plan to manage it in your head. 

It’s more than just numbers on a spreadsheet, true money management is a strategic approach to allocating and spending to get the maximum use your resources to achieve your financial goals.

Saving

Saving money is taking care of yourself.

I like this advice, especially with the current self-care discussion. 

Saving your money is a form of self-care. It reduces your stress and gives you peace of mind. Savings create a buffer between an event being devastating or inconvenient. 

Having savings can also increase your enjoyment because you can do what you desire without using debt.

Pay yourself first.

Now that you know savings is a form of self-care, it is important to prioritize it. This is good advice because saving money must be intentional, not an afterthought. 

It is easy to focus on all your obligations first and save what is left, but that’s a mistake. When you prioritize saving, you save. When you don’t, you don’t. It is that simple. 

Saving has to be a must-pay bill like the other bills. Save first and structure your life around what is remaining. 

Savings has to be a must-pay bill.

I would also add in tithing and giving along with saving, but that is a section for another day. 

Save with different sinking funds

Saving all your money in one large sum is a recipe for confusion. 

If you are saving for different purposes, open another account dedicated to that goal. For example, if you would like to save for a vacation and buy a new car in the future, do not lump all your money together. By keeping the savings account separate, you can see how close you are to achieving your goal and make adjustments accordingly. 

Opening a new account is an easy process once you have an established relationship with the bank. Also, it does not cost you anything to request another savings account. To simplify saving, request an automatic deposit from your pay check directly into your new savings account.  

Investing

There were several comments about investing.

Yet investing is the less-known subject which is why most people do not actively participate in it. We learn so much in school and yet the education system cannot find the time to ensure people understand how to make their money work for them. Interesting, isn’t it?

Quite a few people provided advice here including myself. 

Invest Early and Consistently

The power of compound interest should be a required study in school.  This is how people can accelerate their wealth at a low upfront investment that can result in massive gains over time. 

The problem is the perception of what is a low investment at a young age.  At age 30, a $100-200 investment may not seem like a big deal, but an 18- or 20-year-old may think that it is too much to invest at one time.  But if you can convince the 18-year-old to invest $100 consistently, they will build a strong financial foundation that many of their peers won’t have. 

I will also add another piece of advice here and that is to understand the market. Yes, you can invest without understanding the market. You can contribute to investments and not know what is going on and why. Luckily the market has increased over time, but there is risk and it has cycles. And you don’t want to be caught in the downward cycle especially when you need the money.

You want to be the type of investor who knows how to make money in the stock market whether it goes up or down. I started learning more about this by studying Technical Analysis. Here is a good starter book to help understand this discipline. 

Student Loans

I would be 10 years ahead of where I am now if I had not taken out student loans.

Student loans can have your finances in a chokehold if it is not managed properly. Luckily there are resources available to manage this debt. The key is to not take out excessive loans and make sure that you have a positive return on investment.  Specifically, determine if your career or business will generate enough income to pay back your college tuition in a reasonable time (less than 10 years). Meaning if you are getting a job that pays $40K, it does not make sense to take out $75K of student loans. You can still work at that job, but find another way to pay for it or choose a different school. There are many ways to get a college education. But we must stop allowing kids to drown in student loan debt as the only way to get a quality education. 

Student loans cannot be discharged in bankruptcy so you are going to have to pay those back at some point. Furthermore, the interest rates increase the amount of debt that you owe overtime. The moral of the story is to try to avoid them or get as little as possible. 

Have A Financial Goal 

If you do not have a goal for your money, someone does.

Money is a servant and it will gravitate to the person who commands it. 

In addition to commanding your money, having a goal simplifies your decision-making process. For example, when you get a bonus, your goals will tell you how you need to allocate the funding. Your goals are a guiding line that helps you determine your why and stay focused on building wealth.

YOLO 

You can’t take it with you. (Wildstyle. Lol)

There had to be one outlier in the group with the ‘You only live once’ motto. Lol. This is true. You only have one life to live, but you don’t have to go broke living it. Rather we must manage what we have effectively and multiply it so that it can be used in the future. 

The YOLO mentality can also be used for people who doesn’t care how we treat our the planet. Lol. You only live once, forget about the rest. Now, I know his person didn’t mean this, but this philosophy can be short-sighted. 

Yes, you should enjoy your money and spend it, but you don’t have to spend it all. 

The Bible also talks about a good man leaving an inheritance for his children’s children. The YOLO mentality is part of the reason that families leave an inheritance of debt, nothing at all, or have to financially depend on their children in the future. Yes, live once, but steward your resources also. You can do both.

A good man leaves an inheritance for his children’s children.

Proverbs 13:22

As we grow older, there are many lessons that we learn along the way. Some we learn early in life and there are others that we learn later. In the case of money, it is better to learn it earlier, but it is never too late. What is most important is that you act on what you learn now.  And even if you did know the information before, if you did not act on it, you are in the same position as someone who was not aware. 

It is our responsibility to learn these lessons, practice them, and then teach the next generation. Our goal should be to not have the next generation say they were not aware. We do them a disservice when we know the information and do not share it. 

If you don’t know how to start this conversation, share this article. 

So, which money lesson resonated with you the most? Would you add a new one? Drop a comment below.

Let’s get these Finances On Point.