Learning about finance can be tricky to navigate. There’s a lot of information out there, but everyone has different credentials. A lot of people talk about finance in terms of ideals. They’ll tell you what you ought to do, but this often dismisses your personal situation. So, people ignore a lot of the information they receive.
To make matters worse, many people establish their financial knowledge during a vulnerable time. This is early into their careers when they have new jobs and need to check a lot of boxes while filing paperwork. Now they have money coming in, but they’re also juggling some debt and financial commitments. This can make it hard to think long-term when short-term commitments are necessary for survival.
I’ve been in this situation, and a lot of people would tell me what I should have done with my money. Unless you birthed me, I probably ignored the advice given to me. In retrospect, some of this information was probably really valuable. I never found myself in financial duress, but I wasn’t perfect either. If I could turn back the hands of time, I would do a few things differently.
1. Learning About Stocks and Investments
In my earliest jobs, I was thrilled to have any type of money coming in. I also knew it was important to save and plan for retirement, but it’s hard to watch your paycheck shrink. So, I avoided conversations about retirement and never bothered to learn about stocks. Anytime someone would talk about the stock market I’d just tell them I don’t understand it, so I’m not going to bother.
Fortunately, some concepts made it through. I knew enough to contribute to my 401K, especially when there was an employer match. Knowing my employer would give me more money made the decision easier, even though I didn’t see the money right now. Beyond that, I just put money into my savings account.
During the pandemic, I started to learn more about the stock market. I watched the interest on my savings account shrink to about 0.1%, but the few stocks I did have were growing much quicker. At this point, I realized I should have put more money into stocks rather than exceed my goals in a savings account. Saving money, especially in secure stocks, has the best returns if you do it young. Yet I didn’t contribute much because it was complicated. People told me it was a better option, and they were right.
2. Stop Keeping “Good Debt”
Like most students, I entered the workforce with student loan debt. Fortunately, my monthly payments were manageable. As I started to earn a little more money, I could pay more than the minimum. Some people told me this wasn’t a smart idea because managing debt could build my credit score and debt collectors didn’t require these payments.
I listened to this advice way longer than I should have. It sounded nice because it meant I wouldn’t need to spend the bulk of my savings making overpayments. But there’s one guarantee when it comes to debt: interest. Making the minimum payment ensures that interest can keep accruing and the final price of the loan is greater than anticipated.
One day, I said enough was enough. I paid off my student loans once and for all. It seemed like a big accomplishment, but it was also scary. This consumed the bulk of my savings, but I saw the benefits almost immediately. I didn’t need to spend hundreds of dollars each month making payments. That money was mine, and my credit score wasn’t dependent on my student loans.
3. There Are Jobs Outside of the Office
Obviously, most people need to work. They need money coming in, and a 9–5 is a good way to earn a consistent paycheck. I’d never discourage someone from taking a job, especially if it’s part of your long-term goals, but there are other ways to earn money.
School can feel very career-focused, and it should be. In most cases, you’re earning knowledge and credentials that will qualify you to find a job. This sounds straightforward, but it can be disheartening when you don’t have a career path in mind. During my time in school, I felt like I needed to get a good job, but I didn’t find myself interested in a lot of the academic offerings.
Some people discussed rumors of other sources of income. When I was young, I wish I put more focus on these endeavors. While they wouldn’t have fully supported me financially, they can serve as a nice addition to my income. Independent work also forces people to take a more active interest in money so they use money as a tool. Now that I am older, I’m very interested in self-employment and complimenting my income with side projects. If I had listened to this advice when I was younger I would have learned more about money and found job options that I found more interesting.
Take Financial Advice Sparingly
Of course, hindsight is 20/20. I know people have given me a lot of financial advice when I was younger, and I rightfully ignored a lot of it. As I got older, I started to make decisions based on my personal situation and financial goals. At that point, I recognized some people had given me great advice. I thought I knew better, but these people were really looking out for my best interest.
There’s no surefire way to know the value of the advice you receive. When it comes to finance, there’s no one-size-fits-all approach. A lot of people simply mimic statements they’ve heard other people say and assume it’s the right solution for everyone. People who truly understand money are able to take these concepts and turn them into individualized suggestions. When you find someone who personalizes information and looks out for your best interest, it’s worth listening to them. You don’t need to cling to their every word, but they might be able to view your situation from a different angle. Internalize this advice, and see if it can benefit you. You can make the choice to reject it, but you’ll have regrets if you ignore advice for the wrong reasons.
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