What I Wish My Younger Self Knew

As my own children move into adulthood, I am stopping to think about what advice they could use early on and what would they listen to starting out on their own.  I began remembering what I knew and, more importantly, did not know at that age, just starting out. After some thought, here is what I wish my younger self had known.

Have a Goal

My mantra to clients is intentionality.  There is no magic number for how much to earn or save or spend, but rather are you doing each of those things and making life’s trade-offs to achieve your larger life goals.  Many people go about life reacting to immediate issues and just do things because that’s how they did it before.  While you don’t have to be someone who has a detailed long-term vision of how they want their life to play out, stopping to think about goals, whether it be for the next year or even a five-year plan, would have focused my spending and emboldened me to save towards goals.



A concrete step is to have a budget.  I didn’t pay much attention to where my money was going in my younger days.  Beyond the fact that my bank account stayed positive, I didn’t have an actual plan.  Having a budget allows you to allocate for different purposes: paying bills, discretionary spending for clothes and going out with friends, and savings for longer term whether it be a vacation, a car or retirement.  It can be really eye opening to track your expenses against that budget and help you see what you can do differently. Wow, if I don’t pay for Uber Eats so many times a week, maybe I can afford the vacation I want. Saving and spending with a purpose in mind makes it more doable.

Emergency Fund

While it seems remote, being financially prepared for an emergency greatly reduces the panic when life’s inevitable bumps happen.  Maybe the car needs a $1,500 repair.  Or maybe you get hit with the layoff during an economic downturn as I did.  Having two months of living expenses in the bank helps you deal with the unexpected and allowed me to focus on getting that next job without also panicking about how I was going to pay the rent.  Relying on credit cards and loans for emergencies adds the financial stress of debt at an already stressful moment. As you become more successful, building a liquid fund that is 3 or 6 or even 12 months of basic expenses allows you to make the right choice, rather than the expedient one, when you are forced to change jobs or face other life obstacles.  That job loss emergency fund does not have to be in the bank, it can be part of a liquid brokerage account that has the potential to grow to reach other goals, but you will thank yourself for building one when you need it.

Retirement Savings and the Power of Compounding

Fresh out of college, retirement seemed so far away.  Saving for it seemed such a low priority when there are so many other goals to deal with first.  Allowing the power of time to compound your retirement savings, even if it is a small part of your paycheck each month, grows those small monthly contributions into a real nest egg for retirement.  And you don’t want to leave the “free money” of a company retirement match on the table.  Trying to at least save enough to receive the percentage your company will give you in retirement investments, only if you save as well, can really boost that retirement next egg.  As an example, if I earned $40,000 a year and saved 3% of that to my 401(k) each year, about $50 a paycheck, for 40 years and it earned 7% per year, I would have $113,000 in retirement. And if the company also provided a 3% match my savings would be doubled. As it is taken out of my paycheck automatically, I don’t really feel the initial savings, but I will feel the benefit in retirement. And if I didn’t automatically save it, it would probably have been spent without realizing it. If I had understood it in that way when I was younger, I would have been totally on board with saving to my 401(k).


There is a time and place for debt.  Purchasing a car or a condo that you will use over many years is an appropriate place to use debt to pay for that use across those years.  Credit cards can be useful to make purchases, but you need to be able to pay off quickly as the interest and fee charges can mount rapidly.  Using a credit card wisely allows you to build your credit score over time, making it easier to borrow when you are ready to make a big purchase. But be careful that your credit card spending doesn’t lead you to a habit of over-spending.

Protect Your Health and Wealth

Insurance can seem like an expense you might want to skip.  Insurance is what can protect you from the unlikely but really bad scenarios, often called the tail risk.  You might view yourself as young and healthy and wonder why you need to pay for health insurance.  But then an unexpected emergency surgery happens. The bill before insurance coverage for just such a situation was $135,000 this past spring for my adult child. Without health insurance, it would take years to dig out from under that debt.  Or what if your apartment building has a fire and you lose everything?  Just replacing a few items of clothing, never mind furniture and electronics, and you are out many thousands of dollars.  So, those insurance premiums really do buy important protection.

Build Good Financial Habits

In hindsight, there are many financial lessons I wish I had known when I was younger. While I can’t change the past, I can pass on these lessons.  Remember, financial success is not just about accumulating wealth.  It is also about achieving financial freedom, reducing stress, and having the resources to pursue your passions and goals.

Reach out today. This could be the start of a great relationship.

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