There are a few things I wish I had known before heading into the real world. (My actual graduation…I’m in the middle.)
Yesterday at Gather Little by Little, a reader asked a question. Dave wanted to know if there was anything anyone could have told Gibble that would have prevented him from hitting his financial rock bottom. He also mentioned he was interested in hearing what other personal finance bloggers have to say. And it just so happens that my husband and I were talking about this subject on our walk Tuesday night.
I honestly don’t know if anything could have prevented me from hitting financial rock bottom. On the one hand, I’ve always been a fairly responsible person. On the other hand, I’ve always been a very strong-willed person, and if I get it in my head to do something one way, nothing will change my mind. With that in mind, I’ve had to learn a lot of things the hard way.
That said, there are a few things I wish I would have known before setting out on my own financially. These are things I’ll be teaching my own children before they leave for college.
I’ll give my mom credit. She told me debt is bad. Unfortunately, the way I interpreted that is “debt is bad if you can’t pay the minimum balance.” I’ve always had great credit. I’ve bounced two checks in my entire life, both in the same week, and both because of a calculation mistake on my part.
I’ve never paid a credit card bill late, and I’ve always paid at least the minimum. But I didn’t understand the concept of spend less than you earn. I always strove to spend what I earned or less. And what I charged on a credit card didn’t count in my mind, unless I couldn’t afford the minimum payment.
I never saw the need for a budget. I figured if I wasn’t overspending, I didn’t need a budget. I don’t even think I knew what a budget was, until after I was married. I remember sitting in premarital counseling, and our pastor told us to write out a budget. Our first budget was a joke. Nothing for car repairs, medical emergencies, or other irregular expenses.
I wish I would have known the importance of budgeting for irregular expenses, so I didn’t spend many years trying to deal with irregular expenses as they came up.
At 36 years old, I’ll admit that I still don’t know much about investing. It’s on my list of things to learn. When my husband and I were talking the other night, we were looking at the expensive houses for sale in our area. My husband lamented that he wished someone had told him to invest in one of those properties way back when they were inexpensive.
When I was in college, I figured I’d be financially responsible when I settled down with a husband. My husband thought the same thing. I was almost 24 when we got married, and my husband was 30. Add to that the years we spent trying to figure out how to manage our money, and we missed a lot of years that we could have been buying a house or managing investment income.
If we had known about compound interest, the long term value of buying a house, and the importance of starting early, our finances might be in better shape today.
I say might, because like I mentioned before, I don’t always listen to advice. In the end, I’m not generally one to look back and wonder “what if?”. I’m focused on the present time, and I’m thrilled with the financial turnaround we’ve made so far. I’m also optimistic that there are good things ahead for us.
But I will be teaching my children these three things, so they never have to look back and wonder what if.
What about you? Is there any advice you wish you’d have heard when you were younger? Would it have made a difference?
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I'm just an average mom, trying to live a frugal life and get out of debt. I write about things that have (and haven't) worked to improve my family's financial situation. What works for me may or may not work for you, and you should always consult a financial advisor before making important financial decisions.
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