The following is a guest post from Martin of Studenomics. He has just released his premium guide on how you can Completely Conquer Credit. If you’re tired of spending all of your money on debt payments and want to see SERIOUS results, you need to check out this guide.
Jana recently responded to a post with her side to the story as to why she didn’t learn certain financial skills in her 20s. I had a chance to meet Jana a few weekends ago in Chicago and we got to chat about various subjects, with none of them being related to personal finance (Admin note #1: It’s true. We talked about nothing personal finance related). A few days later I was asked to respond to this specific post and here I am with my side of the story. I’m a 23 year old dude that has been blogging about personal finance since 2008.
I wanted to respond and share why you have no excuses for not building financial skills in your 20s:
We’re all going to be “old” one day. I won’t be old like Jana for another decade so it’s all good (Admin note #2: Thank you, Martin, for reminding everyone that I’m 34. It was sweet of you). The reality is that we’re all going to grow older (not grow up) so we need to keep this in mind. It’s easy to dismiss financial issues and tell yourself that you’ll deal with it when you’re older. The major problem with this is that you won’t just automatically improve your financial skills as you get older. There’s no guarantee that age=increase in financial wisdom. You need to get started ASAP. If you can’t save five bucks when you’re 17, you won’t be able to save $5,000 when you’re 27.
Figuring out money management is actually really easy. It really is easy to manage our own money (unless you’re a celebrity!). We just listen to too many delusional people that want to act like big time investors and share complex investing strategies with us. We need to bring it back to the basics. This is the same advice that I give my friends that are just getting into weightlifting. You need to keep it simple. With weightlifting you need to train hard, rest, and eat well. With money management you need to increase your income, spend less than you earn, and save the rest. You can get more complex and start debating the minutiae. All you’re gong to do is overcomplicate something when it should be simple.
Once you get more advanced you can worry about balance transfers, buying shares, and different investment strategies. As a 20-something you need tomake money, look to increase your income, watch your spending, and savewhat you can. There’s nothing else to it.
Parents are not the only role models. We all look up to our parents. This doesn’t meant that our parents should be our only role models when it comes to money management. Blaming on our parents for our poor habits is justifiable… in elementary school. Once you hit the age of 18 you’re responsible for your own decisions and you have nobody to blame. You live in the real world and sure your parents can
help you out. You just can’t rely on your parents for a bail out. You also can’t blame your parents for poor skills.
You’re on your own now. The beauty of life is that you really can do anything that you want to do. You can apply to any school for any program. You can start any business that you want. You can choose to save money or you can squander it all. We all have enough resources available to us. We just need to take advantage of them, find different role models, and stop blaming our parents.
You don’t have to be patient to save money either. I’m the least patient person in the world. I bought an expensive Macbook Air while travelling through Budapest, Hungary without much thought at
all. All this means is that you have to work with your weakness. If you’re impatient with your spending then you need to keep your money locked up! There are many investment vehicles and accounts where you can lock yourmoney up. If your account requires 3-5 business days to access your money that means you have a few days to think this impulse purchase over. We need to accept our weaknesses and work with them.
That’s my side of the argument. There’s no excuse that you can convince me of that you can’t build financial skills in your 20s. I can out drink most people on a Wednesday night and I like to have fun. This doesn’t mean that I ignore my finances.
If you enjoyed this post please don’t forget to pick up your copy of Completely Conquer Credit (Admin note #3: I had a chance to preview Martin’s book. It’s quite good and it’s definitely full of information I wish I had had in my 20s.)
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