I wasn’t always good with money, especially when I was younger. It really wasn’t until I started Business School that I realized how important it was to develop better financial literacy.
I’m still young since I’m only 26 years old, but I’ve learned a lot over the years and there are several bits of advice I would tell my younger self.
Everyone makes mistakes and it’s only natural. However, learning from our mistakes and making sure that we don’t make them again is essential for financial success.
Here are 10 pieces of money advice I would tell my younger self:
1. Stop spending all your money on clothes
I spent way too much money on clothes when I got my first real job after University. I was also watching a lot of Sex & the City at the time and Carrie Bradshaw’s obsession with great shoes definitely had an influence on me. (Please tell me I’m not the only one in love with Carrie Bradshaw’s shoe collection!)
I kept trying to convince myself that I was investing in my wardrobe, but in reality, many of the items I bought just ended up sitting in my closet untouched, or I only wore them a few times.
Seriously! I can’t believe how much money I wasted on clothes, it disgusts me.
Doing the no new clothing challenge for a year really opened my eyes to the dark side of the fashion industry and has changed my spending habits for the better.
2. Extra income doesn’t mean it needs to be spent
I have always been pretty good at saving money, but whenever I got extra money for my birthday or a pay raise at work, my mind would automatically think: Yay, now I can get those new pair of shoes I’ve been eyeing at the mall, or try that new fancy restaurant in the city.
Extra income though doesn’t mean it needs to be spent on a new pair of shoes or a fancy dinner. Instead, I learned to save that money for a rainy day, or to invest it and watch it grow over time.
This doesn’t mean that I don’t have any fun, but now when I get extra income, my mind has shifted from spending it on things, to saving and investing it instead.
Want a free worksheet to help you organize your finances and become debt free? Get my free debt payoff tracker here:
Related: How to be rich in your 20s
3. Start saving money sooner
I was really good at saving money when I was a kid. Instead of spending my weekly allowance or birthday money on candy and toys, I would save up until I had enough money to buy something big, like a bike or iPod.
But once I spent it on these big purchases, I would start back at the bottom, and wait for my savings to grow again.
I was pretty good at delaying gratification, even now as an adult, but once I got my first real job after University, I developed the “treat yourself” mentality.
I used to think that because I worked hard for my money, that gave me permission to treat myself to new clothing, food, shoes — you name it! As long as my expenses didn’t exceed my monthly income, I convinced myself that it was okay.
But in reality I was mindlessly spending my money on things that I didn’t need — they were all “wants”. It wasn’t until I decided to go back to University to get my MBA that I made a solid financial plan to save my money.
If only I started saving my money sooner though, I would have been able to reach my financial goals faster.
4. Just because it’s on sale doesn’t mean you need to buy it
This is by the far the single biggest piece of advice I would tell my younger self.
My frugal self never likes to pay full price for anything, so I naturally gravitate towards the sale section, but this quickly became my biggest weakness.
I would end up buying things just because it was on sale! My mind would think: Wow, this dress is 50% off the retail price for a limited time only. I don’t really need it… but I’ll find a place to wear it – SOLD!
Sometimes I would buy things even if they weren’t my size, thinking that someday I’ll fit into it, or someday I’ll take it in for alterations. Of course those “somedays” never came and I was just throwing away money.
WHAT A WASTE!
5. Learn about investing and start investing your money sooner
I never thought about investing when I got my first job after University. I figured that it was something I would do once I got older (in my 30s and 40s).
It wasn’t until I went to Business school and started reading more finance books that I learned how important it was to start investing at a young age.
So much time and money wasted in my early 20s!
6. Practice self-control
If a week went by where I didn’t buy clothes or material things, I felt like I was doing good and saving money. But I never thought too much about the amount of money I was spending each week on food and drinks.
I didn’t go out for lunch every day because I knew how expensive eating out was, but sometimes I would get lazy, forget to pack a homemade lunch and end up spending $5-$10 each day on meals at work.
Of course it didn’t stop there, because when the weekend came around, I would often go out to eat with friends or my fiancée – I was spending way too much money on food. I needed to practice self-control and get my spending in order.
Once I started to track my expenses and realize that a huge chunk of my income was going towards dining out, it forced me to create a budget for myself and begin cooking meals at home instead. Having homemade meals has helped me to eat healthier, lose weight and save money – a win-win all around!
If you’re having trouble kicking a bad financial habit that’s costing you money, here is a great article on how it can actually be easier to create a brand new habit instead. Check it out here!
7. Pay attention to where your money goes
Just because my expenses never exceeded my monthly income didn’t mean that I was in the clear. Sure I never got myself into debt, but I also never really paid attention to where my money was going either.
Once I saw how much I was spending at the coffee shop each month, I made a plan to seriously cut back on my spending. Then I was able to save my money and put it towards better things, such as investments, my education and travel (which is important to me).
8. Take advantage of your credit card rewards
It wasn’t until I went to Business School that I got my first credit card. I didn’t bother to do my research beforehand to see which credit card was right for me.
Instead I just opted for the Scene Visa card since I was already using the Scene Debit card. (This allowed me to collect points to redeem for free movies and restaurant gift cards).
There is nothing wrong with the Scene Visa card, but I wish I got a credit card that offered travel rewards instead (which I just got recently).
Travel rewards would have been able to cover some of my travel expenses or allowed me to travel more often. At least I’m collecting travel points now!
9. Ask yourself these three questions before buying anything:
- Can I afford this?
- Do I really need it?
- Can I find it cheaper somewhere else / Will it go on sale soon?
I could have saved so much money and prevented a number of impulse purchases if only I asked myself these 3 key questions before buying anything.
10. Learn how to negotiate
When I was younger, I made the mistake of not negotiating any of my salaries.
To be honest, I always just took what I was given and never questioned it. I felt uncomfortable negotiating my salary and didn’t educate myself on how to actually do it effectively.
It’s also important to negotiate other things too, such as your monthly mobile phone bill. I just learned about this tip in the last couple of years.
By calling my phone service provider, I was able to negotiate a lower monthly rate, which saves me almost $10 off the retail price each month.
That’s an extra $120 in my pocket every year!
Over to you — what money advice would you tell your younger self?
MY FAVORITE MONEY-SAVING TOOLS
LENDKEY: To get the best deal possible on your student loan, I recommend using LendKey. LendKey can help you save thousands of dollars by refinancing and consolidating your student loans into one manageable loan with a lower interest rate. Click here to learn more about how LendKey can help you save money.
TRIM: Trim is a free virtual assistant that constantly helps you to save money. It’s essentially a robot that analyzes your accounts to find recurring subscriptions and determine where you can save money. Trim has saved folks more than $8,000,000 and can help you save money quickly too. Click here to start saving money with Trim!
ONLINE SURVEYS: Online surveys are a great way to make money in your spare time. You can earn an extra $100-$600 per month. Here are a few of my favorite websites:
- Swagbucks (get a $5 bonus when you sign up)
- American Consumer Opinion (this website has over 6 million members worldwide)
- Panel Place (get rewards in cash, checks, or vouchers to all your favorite brands)
- Quick Rewards (get rewards in cash or gift cards to a variety of places)
EBATES: Want to earn cash back when you shop online? Ebates acts as a shopping portal offering coupons and cashback from over 2,000 online stores. I always check on Ebates first whenever I shop online! You can join Ebates for free and get a $10 welcome bonus when you sign up through this link.
START A BLOG: Blogging is one of my favorite ways to earn extra income. You can start a profitable blog for as a low as $2.95/ month. If you enjoy writing and are passionate about a certain topic or niche, then I recommend starting a blog. You can use my free step-by-step tutorial on how to launch a blog, which includes a discount for my readers and a FREE domain.
For more awesome products, please check out my resource page.