10 Things I Wish I Knew About Money Earlier

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Now that we finally got our crap together financially, I think about all the mistakes we made in our earlier years of adulthood. Things I wish we knew about money that we just didn’t learn or were too immature to really grasp.

These mistakes would have saved us all the financial stress and headaches we have gone through in recent years. But we learned and grew from these financial missteps.

And since we are finally navigating Baby Steps 4, 5, and 6, we hope to help other people avoid the bad decisions we made. So, let’s get on with the things I wish we knew when we were younger…

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1. You need a budget

Budgets get a bad rap. Budgets aren’t just for broke people; they are for financially responsible people (financial badasses). Budgets are absolutely life-changing when you learn how to do it the right way.  

In my 20’s, I had a ton of debt racked up, and I remember sitting down and writing out endless “budgets” for every paycheck. It wasn’t until we took Financial Peace University that I figured out what I thought was a “budget” actually wasn’t. We finally learned how to budget and were able to pay off a significant amount of debt.

I wish I would have know how important a budget was. Therefore, I encourage everybody (young and old) to take control of your money and get on a budget! It’s never too late.

things i wish i knew

2. Save for emergencies

Almost half of households (41% to be exact) don’t have enough savings to pay for a $2,000 expense according to this survey by Pew Research Center. Much too often, we depend on credit cards to get us out of tight situations instead of saving for the unexpected.

It seems silly looking back, but I honestly never thought about saving money for emergencies. I always thought that’s why there were credit cards…in case of emergencies! But even the term emergency gets blurry when you’re a young adult because everything seems to be an emergency.  

I wish I would have known the importance of saving for unexpected events and knew what an actual emergency was. If only I had saved a 3-6 month emergency fund, I probably wouldn’t have gotten myself into such a financial mess.

3. Debt is crippling

Debt can quickly spiral out of control. One minute you’re buying something and saying to yourself, I’ll pay it off when the bill comes in. Next, the bill comes, and you don’t have the money to pay off the total. And so you continue like this until you are up to your eyeballs in debt and have no idea how to start paying it down.

If you don’t know how to use credit cards responsibly, debt becomes a bottomless pit that is difficult to climb out of. I wish I would have had the self control to save for what I wanted instead of buying it with credit.

4. Pay off student loans ASAP

If you can manage, don’t take student loans out at all. But, if you do, make sure when it’s time to chose the payoff plan you chose carefully.  

I thought I did most everything right. I went to an affordable college and got scholarships, but little did I know I made a huge mistake when choosing my payoff plan.  

Like most new graduates I knew, we were just starting careers and wanted the lowest possible student loan payment. So, I chose the lowest amount over 20 years. Honestly, I just had the mindset I was going to make these payments over the next 20 years…and that was that.

One day (around year 10 of paying loans), I realized my student loan amount had not changed very much. That’s when I actually looked into it. I had spent the 10 years prior, paying interest! Talk about a punch in the gut.

If I had a different mindset, I would’ve realized that I needed to pay off my debt ASAP. And had I revisited the payment plans, I would have known having a higher payment would pay off the loans faster with less interest.    

5. You don’t need a new car

Did you know the value of your car decreases significantly the first 5 years you own it? According to Carfax, the value of a new vehicle drops more than 20% in the first year, and then 10% annually for the next four years after that. Crazy right?

When I graduated from nursing school, I bought a brand new Pontiac G6 hardtop convertible. It had all the bells and whistles, and it was…. brand-spankin’ new! I did love that car, but when it came time to upgrade to a family-friendly vehicle, my car’s value had decreased significantly. Not to mention the debt I accumulated because my car payment and my monthly living cost were just too high.

If I had to do it all over again, I would…

  1. buy a car I could afford to pay for in cash.
  2. buy a used vehicle compared to a new one.

6. Save for retirement 

I must admit, retirement is usually not on the list of priorities for a young adult. But, it is so important!

Now that I am in my mid 30’s and my husband and I are finally starting to save for retirement, I think back on how stupid it was not to start earlier.

There is this magical little thing called compound interest, and it works best the earlier you start. Basically, the interest or rate of return you make over a year of investments is reinvested and continues on each year. This is huge because the longer you save, the more you will have come time for retirement.

Therefore, I wish I would have thought more long term as a young adult. We most certainly have time, but we missed 10-15 years of compound interest we could have taken advantage of. 

things i wish i knew

7. You have to talk about money

Talking about money with your spouse is an absolute must! You have to talk about your finances with your partner…everything…the good, bad, and the ugly!

This, I think, was the biggest financial mistake we made. Doug and I started our marriage out with huge financial problems, except we were oblivious. We had no idea how important talking about our finances was to our marriage.  

We had separate bank accounts, and we never knew what the other was doing with their money. So, it was easy to not be entirely truthful about the amount of debt that I had. I was secretly hoping I could pay off my debt somehow without Doug finding out. This, my friends, is called financial infidelity…

Thankfully, we found Dave Ramsey and the Baby Steps. We established an open line of communication and were able to recover from it all. But, if I had been open and honest years ago, we wouldn’t have had to deal with a lot of the financial crap we went through.   

8. Live within your means

Trying to keep up with the Joneses is bullshit! Comparing your life and trying to keep up with others, especially if you’re going into debt, is just nonsense. 

For a long time, I found myself spending money trying to keep up with people. Not even people I really knew, but people on social media. I was spending money I definitely did not have to impress…well, really no one.

“It’s time to stop buying stuff we can’t afford with money we don’t have to impress people we don’t like.”

-Dave Ramsey

This quote above resonates with me…I feel it in my soul whenever I hear Dave Ramsey say it. It makes me angry that I fell into this mindset and sad because I thought I had to back then. 

I guess this one may come with age for some people. But, I wish I would have gotten to this point sooner…being happy with the simple life that I have.  

9. It’s ok to rent

I remember growing up and being taught that renting is a waste of money. But, life isn’t what it once was. Decades ago, you would be a house and live there your entire life. In today’s world, there really is no such thing as a forever home.

Years ago, we jumped into buying a house because we thought that’s what young adults do. As our luck would have it, my husband got orders shortly after closing. And to make matters worse, the housing market crashed, and we were quickly underwater and unable to sell our house. So, we rented it out for the next 10 years. During that time, we had awful tenants and a bunch of really costly expenses.

Honestly, we had no business buying a house at that time, especially with my husband being active duty military. But, we gave in to the pressures of “the American dream” from society and family.

I wish I would have known that it’s ok to rent and not waste money. You rent until the time is right to buy. We should have waited until we were financially secure with a down payment saved and in one place for a while.

10. Work a ton before you have kids

Let’s face it, life is way less complicated without kids. You can do whatever you want when you want. So, spend this child-free time working on financial stability by working as much as possible because life changes when you start a family.      

After my third child was born, I was not able to work as much as before. It no longer made financial sense to keep them in daycare when I was not working. So, I became a stay at home mom and we became a one-income family.  

If I had put more time into working extra before kids, we would have been in a better financial place when we started a family.

Conclusion

I wish we would have had a more solid foundation for handling our money, like budgeting, saving, and spending intentionally.

But, I do not dwell on our past financial mistakes. It sucks that we made them, but we learned and grew from them.

I just hope that I can pass our experience and knowledge on to others, and eventually our children so they can make better financial decisions than we did.

I’d love for you to pin this if you found it helpful!

2 thoughts on “10 Things I Wish I Knew About Money Earlier”

  1. Hi Ashley,
    Wow! This post really resonates with me! I agree with all of these things! I also was never taught much about money growing up and, like you, had to learn the hard way. Paid for college with student loans, racked up credit card debt in college, bought a brand new car I couldn’t really afford when I got my entry-level job out of college, got married to my husband, who also had debt, and we bought our first house! One of the main things we actually did do right was to wait to have kids until I finished my MBA and until we were more secure financially. Anyway, great post! BTW, I am also from PA!

    1. Lisa,
      It’s crazy how fast our finances can get of control when we don’t know how to handle our money. You’re smart for waiting to have kids, they definitely come with a large price tag (but worth it)! Thanks for the comment!

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