Lately, I’ve been thinking about all of the things that I did wrong in my early twenties that have contributed to the fact that I’m not as financially secure as I thought I’d be by now. If I could do it all over again, here are some of the things I wish I would’ve done earlier to get my money in order.
Consolidated my student loans
Consolidating student loans is a MUST. If you’re like me, you have student loans from different loan providers of differing amounts and interest rates. Consolidating your student loans will eventually mean that you only owe one loan provider at one set interest rate. It can be very confusing, but I wish that I’d taken more time to figure out how to do it. This would have saved me money and also helped me feel much more in control of my debt.
Refinanced my student loans
I could have gotten a way lower interest rate if I had. That being said, before you go down this road, I highly recommend that you look more closely at this option. If you decide to refinance, some of the benefits like deferral (if you’re out of work and can’t pay them for a short period of time, for example) are no longer available to you. For me, refinancing has changed my life, especially now that my career is stable and I don’t think I’ll be out of work anytime soon. Had I started this process sooner, I would’ve been able to pay down my principal amount much quicker and saved more money on interest.
Invested my savings
Saving money is everything, so if you’ve started saving portions of your salary then that is awesome. That being said, I wish I’d moved some of my savings into investment accounts so that my money actually started working for me earlier. When you put your money into an investment account (retirement or otherwise), you see higher returns than what the bank will give you for holding your money. Stocks, bonds, exchange-traded funds and other types of investment vehicles can really help maximize your dollar. Unsure where to start? Check out Stash or Acorns. These robo-advisor platforms provide you with all the resources you need to get started investing with small amounts of money. Had I looked into this earlier, I’m confident my net worth would be a little higher!
Taken a financial literacy course
I recently did this and I almost kicked myself for not taking a course like this in college or right after graduation when I entered the working world. You learn so much about investing, credit, saving for retirement, how to buy a house, ways to handle student debt, taxes, and other basic personal financial principles. You don’t always have to do these in person on a college campus, either. Many of these courses are offered online at more affordable rates, so instead of buying that new dress from your favorite online shop, redirect those funds to buying a financial literacy course. It’s totally worth it.
Taken out credit cards with intentionally low limits
Credit card companies love targeting college graduates who need to establish credit, but they do so by offering these crazy high credit limits that can get people into trouble if they start swiping with reckless abandon (I’m totally guilty!). I wish that when I was starting to build my credit, I’d paid more attention to the credit limits. By intentionally choosing a card with a $1000 limit instead of a $5000 limit, the temptation to charge more than I could afford would dissipate because I literally wouldn’t be able to.
Opened an emergency fund account and made regular deposits
I have multiple accounts now, mainly to help me save more intentionally. I feel like if I have a separate account that’s specifically for emergencies or special circumstances, I’m less likely to spend that money because it isn’t tethered to the main banking account that I use all the time. It’s totally a psychology thing, but it works or me! Not only does it help cover you in emergencies, but when you know you have a few thousand dollars saved in a separate bank account, it makes taking your dream job in a different country much easier to pursue. Just saying!
Invested in a few long-lasting professional-wear staples
Offhand, this doesn’t seem like a piece of financial advice, but it totally is. I picked up this strategy when I treated myself to a super nice pair of shoes after receiving a bonus check and I realized that this pricey pair of shoes that I wore often lasted longer than the cheaper ones that I kept replacing or repairing. Now, I have zero shame about shelling out money for staple items like jackets, suits, shoes and a polished bag that has stayed with me for years. It’s saved me a lot of money in the long run.
Designed a financial wellness plan
The same way you might sit down and design your dream board, you should sit down and design your financial wellness board. What does this look like? For me, I mapped out my financial goals including how much I wanted to save in one, three, and five years. I listed my financial priorities like paying down student and credit card debt. I prioritized all of these things and then launched a plan on how to achieve them all. Had I done this when I was younger, I don’t think I would have racked up unnecessary credit card debt or waited so long to look into things a financial literacy class or investing.
Spent only 25% of my monthly salary on rent
When I started living on my own after college, I immediately rented a fancy apartment with a doorman that I felt really proud of. Looking back, I realize that I couldn’t actually afford it! I spent about 40% of my monthly salary on the rent and didn’t have much money for anything else. I’ve since changed this habit, but I often wonder about the thousands of dollars I threw away to rent because I was living beyond my means.
Started a side hustle
Just because you have a day job with a full-time salary and benefits doesn’t mean that you can’t have a side hustle. I wish I’d learned this sooner! Side hustles give you the extra boost of income that you didn’t know you needed. Mine have given me a little bit more financial breathing room and that’s important.
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