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What's the Financial Advice You Wish You Could Give Your Younger Self?

Posted by Shanna Tingom, AAMS® on Mar 13, 2018 12:50:53 PM

While we’d love to live a life not filled with regrets, as time goes by, we’re often faced with the consequences of decisions we’ve made. Whether it’s living at home longer than a few months past college graduation, spending less on a wedding in favor of an exotic honeymoon, or saving for retirement earlier, there’s likely financial advice you wish you could give your younger self. 

The Gellar Principle 

Do you remember the episode of Friends when Monica Gellar has to ask her parents for a loan? Friends fans will know it was episode 14 of season 2 when this exchange took place, 

“10% of your paycheck. Where does it go?” ask Monica and Ross’ parents.

In unison Monica and Ross reply, “In the bank.”

The only problem is that Monica hasn’t saved 10% of every paycheck since her first job and now she needs access to an emergency fund to help her get through until she finds a new job. 

Whether you’re like Monica and need money to get you through a tough time, a vacation fund to get away from a hectic life, a loan to move your business forward, retirement savings, or college fund for the kids, there’s no time like the present to start saving money. 

Start the business later. 

When it comes to financial advice you wish you could give your younger self, I’d say starting the business later is among my favorites. While the economy is trending is toward a freelance or gig economy and it can be tempting to tell your boss where to put the job that you may not like, we caution you not to quit too soon. 

  • Create a business plan.
  • Estimate costs for website, marketing, social media, accounting, office space, taxes, vacation time, healthcare, and other employee benefits, including your own.
  • Research the time and cost to acquire a client, perhaps taking on a few clients as a side business prior to quitting your job. 

As you continue in your 9 to 5 job, create a business plan, save for income fluctuations, and know when it is right for you to transition to owning your own business. We caution you to not throw in the towel too early or else be left short on cash like Monica from Friends. 

Start retirement savings as soon as possible. 

Seriously, don’t wait. While Social Security benefits still exist, we use caution when calculating retirement benefits and encourage other retirement savings including employer sponsored 401k. Once that benefit is maxed out, we can begin to look at other options. As a financial advisor, I offer complimentary account reviews so that you understand your investments and can make changes as needed. 

When you leave that job, and we suspect you will one day, consider rolling your retirement accounts from the employer to an IRA or similar account where you can continue saving for retirement. 

And if there’s one piece of advice I wish I could give everyone, it is to automate savings. 

It’s almost so simple that I forget to mention it but automating savings is among the best financial gifts you can give yourself. Just like you pay your bills, pay your own savings account monthly by setting up a transfer or asking your employer to split you pay into two accounts - one for expenses and the other for savings. Just $50 a month adds up to $600 a year! And if you save in an account with compounding interest, the savings really adds up. 

It is my mission to share the financial advice you wish you could give your younger self so that you can be richer in finances and wisdom!