Having been born and raised in California I forgot how lucky I was. The weather there is great for 365 days a year. Having moved out to Virginia and experienced the cold for the second time I can now say that with confidence. It hit a lot closer to home the other day when I went out for a run.
I checked the weather so I knew it was going to be cold. A chilly 18 degrees but I needed the exercise. The first mile I felt like I was still warming up and usually on the way back I am fine. This run however was different. I immediately regretted my decision once I started running. If you have ever been in freezing cold with the combination of frigid wind you know how terrible this can be.
Before running I saw on the weather app there was wind but I didn’t think much of it. As I started my way back after a mile I was trying to run home quickly but not to fast for fear of higher wind speeds in my face. I somehow made it back, though I think I was a popsicle, vowing to never do that again. (exercising is tough in the winter)
The good news is that I didn’t get frostbite, but I learned my lesson from running in that cold weather and not heeding advice.
A lot of lessons we learn in life are through time and experience. This seemed like a direct comparison to how we deal with our finances. Taking in all the hints that we should or should not be doing something yet we do it anyway, because we think we know what is best. Not planning or making bad financial decisions have major impacts on our lives, even if we don’t see the impact until 20 years later.
Being young we aren’t taught most of our financial skills we should be. Instead, these are learned through life experiences.
Here are 3 quick tips to avoiding mistakes later in life by doing them now:
Failing to make a plan
The biggest mistake that I see young people make is failing to make a plan. We may think to ourselves, “I have plenty of time to think about retirement when I am older,” or “how much do I really need to save up for a house, I’m sure it will only take a month or so to save.” Well, ignorance is bliss until you realize being bliss doesn’t help you achieve the goals you may have later in life.
Getting into debt
Lifestyle is a big part of how we get into debt. As young adults we think that since we recently graduated college we deserve that new car or fancy new toy, when we should be thinking about paying down our student debt. Think about if you will have more or less responsibility later in your life. What better time to get rid of debt than now when you have less responsibility, than say when you have kids? Don’t waste your money on mindless toys, because later in life you may regret it.
Okay so maybe you are saving. The question is how much? Ever heard of compound interest? Even if you are saving is it the right vehicle to save into? We all have a friend trying to sell us whole life insurance or some kind of annuity. Don’t get caught up in these “friends” trying to make a sale. Instead, you may want to save in a company retirement plan or if you don’t have one, consult a professional for the type of IRA you should contribute to. Stretch yourself to save at least 10%. By doing so it will force you to live on less for the rest of your life.
Don’t become one of those people who looks back and says “yup, I should have listened, I should have done that.”
Now is a great time in your life to become financially independent for life.
Want help on any of the above. Why not take the time to sit down and talk things over with yours truly. You never know, I might actually be able to help you.