What Financial Advice Would I Give My 20-Year-Old Self?

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It is so easy to pass judgment or have regrets about the past. We are all well-trained at dissecting our past mistakes and decisions, and I used to excel at that type of self-criticism. But I don’t want this post to sound like I’m bashing myself for my past mistakes and unconscious, uneducated choices because I’m not. The time when I felt guilty about my poor financial decisions is gone for now.

My hope is that the list below will help some of you to start making educated investments and smart financial choices, which, for the majority of my adult life, I wasn’t making.

Financially comfortable people say that money doesn’t give happiness. If you look at money from a consumption point of view, there isn’t much happiness in buying a tenth pair of shoes which you can easily afford. But it’s a different story if you need to purchase shoes and can’t afford them, as most of your income goes towards the basics that help you survive. Money may not give happiness to some, but it definitely offers choices. If you have money, you can say no to a job or a project that doesn’t feel right or walk away from someone who exploits you; you can travel more to places you always wanted to visit, focus on your hobbies or help in your local community. Having choices and time to make those choices is powerful. Feeling empowered could lead to happier and more fulfilled lives with less stress and pressure and more happiness and kindness.

Read the list below, see what speaks to you and see what steps you could implement to set you off on the path to financial freedom. Just remember that 100% perfection doesn’t exist, so taking small steps is always better than taking no steps at all:

  1. First, I would have started saving and investing in my 20s when I got my first job. My 20s are long gone, and regrets take up too much emotional and mental space. Whatever age you are, this is the right time to start saving and investing. By saving, I mean having up to 6 months of your monthly expenses saved up in cash (for that to be accurate, knowing your monthly budget is vital. Comparing your budget with other people’s budgets is tricky as we all have different needs and responsibilities, and most likely, we live in very different realities). Start investing money even if you have your company’s and state pensions. State pensions are becoming more insecure. For instance, the basic state pension in the UK as of this writing is £203.85 a week before tax, which is not a lot, especially if you still have to pay rent. Company pensions can be wiped out if the company goes under or is sold. (check out this BBC article about the British Home Stores pension scandal or the Guardian’s article about the pension deficit in Arcadia, which owned Topshop, Dorothy Perkins, Burton, and Miss Selfridge). Private pensions or investments will give you more security in the long run than state and company pensions. In the UK, employees can opt out of paying into a company pension scheme, which I often exercise as having small pensions in different companies isn’t a good choice for me. Not all companies allow moving pension pots from one to another. Besides, I strongly believe that this money is doing much better in my investment pot.
  2. Get educated. Get educated. Get educated. Never stop reading about finances. And not the crap mainstream media fill our heads with that the majority of the population has difficulties understanding. By design, they make it all sound complicated and complex so people would feel the need to hire expensive advisers and fund managers. Read blogs and articles from people who became financially independent and are on the FIRE (Financial Independence, Retire Early) path, as they offer practical advice. The Internet offers easy access to information, so use that wisely and be vigilant against scammers promising the impossible. When it comes to me, one of my favourite FIRE people is JL Collins.
  3. Don’t let anyone talk you into believing that investments and savings are a stupid idea and that the inflation rate will eat up all your interest rates. 
  4. Don’t tie your value to your finances. It’s a slippery slope in both directions.
  5. Have boundaries around your finances; you don’t need to feel guilty about having money or prove to anyone that you care about them by spending heaps of money on them. Others can and should pay for themselves.
  6. As an adult, separate your finances from your parents’ finances. Of course, helping each other isn’t wrong. Many parents and children do, especially nowadays, when the rents seem crazy everywhere. However, knowing where your financial independence starts and what you can do with your money is a smart transition to adulthood that would benefit you and your parents in the future.
  7. It is possible to make money work for you; you don’t have to spend all your life selling your time for money. Get educated to know how to make your money work for you.
  8. Don’t buy into designer/consumer culture, which is aggressively marketed especially to women. You don’t need all that clothing and make-up to be beautiful. This is just a distraction to keep women dependent on other people, trends, and social standards that are often impossible to meet. Instead of buying one clothing item weekly, put that money towards your holiday budget, investments, dreams, etc. I’m all for buying good quality, long-lasting clothing (I still have clothes from the 1990s, which I wear, and my mum’s jewellery from the 1980s) and would rather pay more to have something l could wear for years than buy fast fashion garments that lose shape after the first wash. There is plenty of advice on capsule wardrobe and accessorising the clothing you already have. Most importantly, you don’t have to prove anything to anyone or dress for anyone. You dress for comfort and yourself.
  9. You don’t need to buy anything on sale. Another sale will be on soon, so don’t feel pressured. Especially, don’t buy anything you don’t need or you think would look good on you only if… (fill in with what you may think)
  10. Buying knicks and knacks might seem like a good idea, but cleaning them is not. Besides, most of them will end up in a charity shop eventually.
  11. The library is a good place to get books from. Over the years, I bought many books and have given away even more, and I still have many I have not read.
  12. You don’t have to constantly eat out or get takeout coffee. This isn’t a status symbol and doesn’t define your life or aspirations.
  13. Work on your inner self to feel confident from within, and you’ll see that many of the items you think you need won’t be necessary as you will have confidence in yourself and your choices.
  14. Haircuts, hair colouring, and beauty treatments may be important, but doing them every month maybe shouldn’t be a priority.
  15. Calculate how many hours you need to work to buy something you don’t need. Is that worth your time?
  16. Always give yourself a week’s grace period when you want to buy an expensive item. The majority of the time, it will be forgotten by the end of the week.
  17. If people celebrate birthdays and Christmas with you, tell them what you need. This way, you don’t get stuff you don’t need or want.
  18. Re-give gifts if there is something you don’t need.
  19. If you want to do something or learn something new, try to utilize online resources. There are lots of choices either for free or at a fraction of the cost it used to be. Education is always worth investing in, but make wise choices, shop around, see what fits your budget, and don’t feel pressured to buy a course or workshop only because others have done it.
  20. Learn how to mend things and make handmade gifts (I’ve learned that over the last few years and would recommend it to anyone). Things you can do yourself are often fun and relaxing, save money in the long run and expand your self-reliance skills.
  21. Re-purpose and reuse things and items from around your house. Old clothing could be used for art projects.
  22. Be kind to yourself if you make a mistake; they happen and are a natural part of life.
  23. Travel more; you can do it on a budget.
  24. Do activities that are free of charge.
  25. Don’t aspire to be someone you are not.
  26.  Don’t feel guilty about your success or having money.
  27. Borrow things from people if you need them or buy second-hand if you can’t borrow them.
  28. Don’t make anyone convince you that it’s easy to sell items; it’s not. So, if you pay for something at full price, use it for a long time.

For now, the list is long enough. What’s important is to start saving and investing as soon as possible, do it regularly (consistency is the key), turn down the doom and gloom noise from mainstream financial advisers and think about investments as a long-term venture. I’m not suggesting anyone deprives themselves of life pleasures. Still, I am suggesting being smart about what gives us pleasure and happiness in life.

If you like this blog keep reading more from the School Runs blog section.

If you are into environmental sustainability on the budget check out my Ecotopia project.

If you would like to know more about my practice, head to my art website.

I’m #MadeByDyslexia – expect big thinking & small typos.

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