Guest Post | Lessons for my 20 Year Old Self: Be Careful With Your Money

If you’ve caught any of my recent Instagrams, you might have guessed that I am on vacation this week! While I’m enjoying some down time in the beautiful Okanagan, my friend Sara has stepped in with a guest post. I hope you enjoy Sara’s savvy advice. These are all things I wish I’d had tattoo’ed on my arm when I was a 20-something.  Since writing about how Carrie Bradshaw is the most unrealistic freelance writer, ever, I think most of these tips are still very relevant to those of us who are now 30-somethings (& beyond!) 

There has been a series on Skinny Dip about the things we all wish we could say to our twenty year old selves. We’ve talked about love and loss and today, let’s talk about money. If there’s one thing we can probably all agree on is that we wish we were smarter with our money when we were twenty.

College students are virtually preyed upon by credit card companies. They set up tables on campuses and harass students passing by to fill out applications. They talk up great deals and the importance of building credit. The problem is that very few students understand how to approach credit correctly. Even if they understand, intellectually, that a credit card isn’t “free money,” they often give in to the temptation to simply pay the minimum amounts due. After all, they can make bigger payments later when it’s more convenient, right?

We’ve all been there. We’ve all been tempted by the siren song of credit, especially when we are young and we want to be able to keep up with our more well off friends.

Unfortunately, for most of us, what this does is set us off on a path toward a terrible credit rating—one that will prove problematic when we grow up and want to buy homes, start businesses, etc. When you’re starting up your first business, you’re going to be trying to find investors and will likely need a business credit card.

I wish I had access to a list of the best cash back business credit cards in order for me to earn rewards while funding my purchases. I had to learn about managing money through my own mistakes back then. But now I’m older and wiser.

So here’s what I’d say to my 20 year old self about money

-Get one card. One. That’s it.

-Pay at least $10 more than the minimum amount due on your credit statement

-Pay your bill as soon as it shows up in your email box or in the mail.

-Remember the physical limitations of your dorm room—can you really fit all of the things you want to buy into it?

-You are not a lesser person if you don’t have the most current fashions, accessories, electronic gadgets, etc.

-Share—share music, share movies, share books. Share instead of buying your own. You’ll look like a genius when you help your friends save money too.

-Saving is not stupid. Putting even $5 a week into a savings account is better than nothing.

-Take a course in personal finance and learn about saving, investing, retirement plans and basic economics now. You’ll look like a genius when you already understand all of that stuff your friends probably won’t bother with until they get their first jobs.

-Get a job and pay off the interest on your student loans each month. Yes, it isn’t due until later but you’ll be thousands of dollars ahead of the game come graduation time.

About the Author: Sara is freelance writer who most often writes about personal finance. In her spare time, she enjoys maintaining a healthy lifestyle through swimming and practicing yoga.

What are some of the financial lessons you wish you had learned when you were 20?

Learning to Spend on the Right Things

I didn’t make any real New Years Resolutions this year (except for one: “Learn how to drive” – more on that later). I already have a long list of things I have been working on since November. One of the things I do want to focus on in 2012 is “spending money on the right things.”

When I sat down in November to brainstorm on ways I could improve my life & love myself a little bit more, I noticed a lot of things were out of balance:

I had a brand-new, unworn Alexander Wang top in my closet but I hadn’t been to the dentist in over a year. I love my Prada eye-glasses that I wear in the evening but I can’t watch any films with subtitles because I have neglected to get the prescription updated (for like, 2 years).  I always seem to have money for nights out with friends but I can’t use my lap-top (the computer I use every day to write and work) without plugging it in because the battery has been dead for god knows how long. My daily wardrobe consists of a lot of white or light colored tops but the only flesh-toned bra I own died about a year ago. Since then I’ve just been wearing black bras with my white T-shirts in hopes that everyone will think I’m doing it on purpose to be “edgy and urban”. I have the confidence to pull this off but really, I just need to buy more bras. Of course there are also all the chiropractic appointments, doctors appointments and bills which were all put off because my mind and wallet always seemed to be elsewhere.

Yes, I have messed up priorities of the First World kind.

I’ve known these truths about myself for a long time but have just been in denial. Although I do enjoy the pretty things I am fortunate enough to own, by not taking care of other areas of my life I’ve created a lot of extra stress. A lot of the negative thoughts I have about myself relate back to how I manage my finances. I want to love myself more and part of that means changing the way I spend my money.

While I am on this topic – I’m pretty sure I’m not the only young professional woman who has felt like this at some point. I feel like we live in a culture where we’re told that it’s OK to make certain sacrifices in order to look good or have fun. When I used to work in high-end retail, several of my co-workers would routinely forgo real groceries and live on a ramen noodle diet just so they could afford the latest $750 handbag on a retail salary. A good friend of mine recently confessed that she owns 20 Marc Jacobs handbags (at $400 a pop) but feels sad that she’s never traveled internationally. I call this the “Carrie Bradshaw-ification” of society. It seems like somewhere along the line we lost our way and it became OK, even chic, cute & urban, to own a closet full of very expensive shoes at the cost of being able to do other things like own your own home. How did this happen and how do we make it stop?

Although I’ll never forgo good food for fashion (I love my veggies & whole grains too much) and try to travel whenever I get the chance, I’ve definitely been the girl at the party with the killer vintage Chanel handbag who has to demurely reach into her handbag mid-conversation to turn the ringer off her phone because creditors are calling about her  large unpaid phone bill. There’s nothing cool or glamorous about it. It’s actually just a shitty scenario that makes me feel like I failed somewhere while on the path to becoming a fully functioning adult.

The great thing about this situation is that I have the power to change it.

So, what does “spending on the right things” mean?

For me, it’s not just about spending money, it’s about spending the time to actually take note of what my real needs are. It means looking after myself, paying my bills first and only spending on experiences & things that will improve my quality of life.

This holiday season, with the help of loved ones, I’ve been able to get a few things that I actually need that will improve my life in small (but large) ways:

1. Matryosh-keys Key Covers: Following my move in October, I realized I had way too many keys on my key ring that all looked very similar. Opening the front door to my apartment building would always involve a few minutes of utter confusion trying to figure out what goes where. I saw these key covers at Nood in Victoria ($6) and decided they would be the perfect way to separate my keys and play up my Eastern European heritage at the same time. It may seem inconsequential but no longer having to spend that 2 minutes feeling frustrated every time I leave my house makes a big difference.

2. The Magic Bullet:  This sounds like it should be the name of yet another luxury sex toy but it’s actually a blender. I don’t think I’ve ever been this excited about a blender before but I love this thing! I like to make green smoothies but I have been avoiding making them because my blender is difficult to clean and it doesn’t fit in my new fridge so I can’t store leftovers. Now I can make a single serving smoothie with less fuss and waste. (Thanks Mom!)

3. Ombrello Black Riding Boots. These are probably one of the nicest gifts anyone has given me. My shoe collection is full of pretty high heels but the boots that I wear on a daily basis were worn out, hurting my feet and causing back problems. My Mom bought me these for Christmas and I absolutely love them. They’re incredibly comfortable, great quality, water-proof and I feel amazing whenever I wear them. I know I’ll have these boots for many years to come.

4. Michael Kors purse: This was my Christmas gift to myself. I know what you are thinking: THIS WOMAN CAN’T POSSIBLY NEED ANOTHER BAG. Yes, I do have a bit of a handbag “problem” but let me explain: I  love my purse collection but I realized something recently: a lot of my bags aren’t cut out for day to day wear. With the exception of my black Longchamp bag & a few summer purses, when loaded up with my daily essentials they hurt my shoulder (and this dominoes into back pain). My body was in pain all the time so I just didn’t notice. This purse isn’t as exciting as some of my other ones but it’s actually comfortable! Plus, it’s a bit smaller which will encourage me to carry less stuff on a daily basis. It was brand new but previously owned so I was able to get it at a very good price. No shoulder pain = worth every penny.

My Dad, instead of giving me a physical Christmas gift, decided to pay for some of my counselling sessions which is way better than anything he could have physically put under the tree.

Instead of hitting up the Aritzia winter sale (which I do enjoy oh so much) I’m using that money to book an appointment with a personal trainer.

Now when I’m faced with making a purchase I try and ask myself “Do I need it? Am I going to feel good about myself for spending my money on this?” If the answer is “no” and the money would be better spent on something I need more, I walk way. Taking control like this feels pretty amazing.

I’ve also started keeping a list of things I actually need and only shopping from that list. It takes a bit of discipline but it works! I already have my next purchase planned out: an electric toothbrush. It’s never too early to start preventing gum disease.

I wonder if Carrie Bradshaw ever worried about her gums?

What does “spending on the right things” mean to you?

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