Top 5 Things I Wish I Had Done in My 20’s

I got an email from Jackie asking: “What did you do successfully in your 20s, or if you could go back in time, is there anything you would have done differently to ensure a better financial future sooner in life?”

First, thank you, Jackie, for perusing my site and for reaching out with your question. I actually wrote the book to tell everyone in their 20’s exactly what I wish I had done differently.

• I devote chapters to planning for your ideal financial life and on money mistakes.
• The first chapter explores your money story which it took me 40+ years to really understand and begin to harness “for good” rather than for just spending.
• I talk extensively about the emotions around money and how emotions and our past beliefs frequently undermine our “best laid plans.”
• I teach the basics of how to get your first dollar invested and how to make your own financial plan regardless of your age.

Basically, it took me 264 pages to answer your question! If you want all my secrets, you probably should get the book.

Here’s a quick Top 5 Things I Wish I Had Done in My 20’s list:

1. Understand your own money story and how it has created your financial belief system. See my blog post on 2/21/15 – Your Money Story Shapes Your Money Reality and chapter 1 in The Graduate’s Guide to Money.
2. Really think about your life and how it is going to be “in the real world” and rate what is most important to you. Is a fantastic (expensive) apartment really important to you or would you rather have money for adventures or travel? Are you going to be spending any time in that apartment when you are 20-something? I didn’t but my clothes had a really nice place to hang out.
   1. One of my biggest money wasters was spending every Friday night in a Buckhead club (the most expensive bottle of beer in Georgia). That is memorable the first time you go, at the bachelorette party, and maybe on somebody’s birthday but other than that, it’s crowded and expensive. Eating PBJs in the middle of a park and playing on the merry-go-round? That’s going to be memorable and super cheap. Challenge your friends to each come up with one free or nearly free event every weekend. It will create memories; in fact the dumber the event, the more memorable it will be.
   2. Don’t assume that a car payment is a part of everyone’s life; it’s not. Think long and hard before you buy a new car when a good used one will do the job. Plan on driving that car until the wheels fall off and certainly for long, long after it is paid off.
3. Set yourself up to always save 10% of your income to your “short-term freedom fund” and 10% to your “long-term freedom fund.”
   1. Your short-term freedom fund is freedom from worry if something big, bad or ugly happens to you. It should be a number that makes you feel safe and secure but at least 3 (and preferably 6) months of your income.
   2. Your long-term freedom fund is freedom from having to earn a paycheck. I don’t like “retirement” because nobody wants to go sit on the front porch in a rocking chair and that is what that word implies. Financial freedom is about doing anything that you want to do regardless of how much it pays.
4. Get your debt paid off more quickly than the payment terms require. Just because they give you 10 years to repay a student loan doesn’t mean that taking that long is the best thing for you. Make a plan (see chapter 5 for details on how you can make a plan to be debt-free) and get that debt paid off. Yes, you might need a mortgage someday but get all of that other consumer and student loan debt retired before you think about that endeavor.
5. Start investing NOW – from your FIRST DOLLAR of income. Libraries could be filled with the books on investing but you can’t be hung up on all the nuances and gimmicks.
   1. Open a brokerage account online (TD Ameritrade, Schwab, you’ve seen all the ads) and get money in there. Chapter 8 explains the very basics of getting started.
   2. If you have a million dollars to invest then definitely come see my firm for help but with your first 100 dollars, pick an all-world fund or a total US market fund and start putting dollars in it. You are looking for growth as a 20-something person saving for long-term freedom so find a fund whose objective is long-term growth and that is widely diversified (all-world is about as wide as you can get).

Those are my top 5. Be sure to sign up for my email list so you can get Avoiding Money Mistakes for lots more ideas from my “don’t” list. And do get the book for a lot more of the “do’s.”

To your financial success!