9 Money Tips for the Next Generation

There is an old saying, “If I knew then what I know now…” Do you ever say this to yourself? Maybe it’s when you have regrets. Or maybe when you learn something new that you wished you would have learned a long time ago. Well, I wish I could go back in time and tell myself a few important things about money. 

While I don’t regret the decisions in my life because I believe they have taught me so much, I do wish I could give myself some financial advice! Here are 9 things I wish I could tell my younger self about money.

1. Start living on a budget as soon as you receive your first paycheck.

I don’t even want to think about all of the money I wasted as a teenager and college student on silly stuff like candy at the movie theater, clothes I never wore, overconsumption of gasoline, and miscellaneous things I didn’t really love. If I could go back in time, I would have lived on a budget from the beginning. When I was 17, this may have been save 10%, give 10 %, college 50 %, spend 30%. While my budget probably would look much differently than it does now, it would have prepared me for “adult life” and given me a great step in the right direction.

2. SAVE SAVE SAVE

I never understood the importance of saving money until I didn’t have any! I knew adults saved “for a rainy day” and it was probably something I would do eventually. But when I was in high school, all I wanted to do was go shopping with my friends and go out to eat and to the movies on the weekends. If I had just set aside a small portion of what I made from my jobs in those younger years, I would have been so much better off financially now.

3. Start investing as soon as you can

Compound interest anyone? Time is money. If I knew then, what I know now, I would have started investing when I was still in high school! Even if I had invested $5-$10 a month for the past 10 years, that would have made a huge difference in what I would have accumulated when I’m in my 50s or 60s. If you don’t believe me, go check out this calculator. Compound interest rocks. Especially when you are young! If your under the age of 21, go open a mutual fund! You can thank me in 40 years.

4. Never ever, under any circumstances, apply for a credit card

I did it. I was 19 years old when I filled out that application for a credit card in a department store. I was enticed my the coupons and discounts I would receive from the credit card I owned. To be honest, it made me feel old. More adult-like. Now I look back and only see how immature and unprepared I was to grow up. 

If I could go back, I would never apply for any credit cards. Ever. Not one. They are not worth the coupons and discounts you receive. While we’ve never paid interest on our credit card, there have been months that we have lived on beans and rice to pay it off. An interesting study was done at McDonald’s that found that when people use credit instead of cash, they spend on average 47% more! You can read more about it here.

Credit cards = debt. Debt = stress. It’s just not worth it.

5. ALWAYS pay cash

We now live on a cash budget. We only use our debit card for online purchases and gas and we don’t use credit cards at all. Paying cash has caused us to spend less and save more. We know exactly where our money is being spent and we don’t overspend. I wish I had started this from the beginning. 

6. Do NOT borrow money for school

You can be a student without a student loan. I wish I would not have taken out a student loan to go to school. It may have taken me longer to get through school. I probably would have had to go to school longer in order to save up cash to pay each semester. However, then I would not have a $10,000 student loan hanging over my head right now! 

Also, had a followed the above suggestions of saving more in high school and not spending haphazardly, I probably would have had more money saved for school.

7. When purchasing a home, get a 15 year fixed mortgage and put {at least} 20% down

This may have been possible had I followed all of the steps above! It may not. Who knows. But I wish we would have at least tried to save 20% before buying our first house and only taken out a 15 year mortgage. 

NOTE: I am very happy that we were able to put down a chunk of money on our current house and we did buy a house below what we could afford. I think it’s almost comical what the banks will loan when in reality that would almost guarantee bankruptcy in many cases. Our house cost about two-thirds what the bank was willing to loan us. I’m very thankful our mortgage isn’t any higher than it already is!

8. If you don’t have the cash in hand, YOU CAN’T AFFORD IT!

This goes for just about everything. School. Houses. Cars. Clothes. Home improvement projects. Dinner out. Everything. I would not take out loans. I would not use credit. I would save up and pay cash. This is our ultimate goal currently.

9. Be generous and give as much as you can

I wasn’t raised in a home that tithed. We gave to our church, but only “what we could afford.” My parents gave what they could, but they didn’t tithe. ‘t wasn’t Biblical. 

My husband on the other hand was raised to tithe. He tithed in school when he was barely making anything. He was very insistent in continuing to tithe when we got married. I didn’t think much of it and just went along with this because it seemed really important to him.

When I finally realized that the money we make is not from our own doing, but because of God, I saw the importance of tithing. Giving 10% back to him because of his amazing grace on us is really the smallest of thing we can do. 

Giving is fun. I’ve been able to see how fun it is to give, not just to a church, but to others. I wish I would have had this mindset from the beginning. I really missed out on a lot of “fun” opportunities. 

So what about you? What would you tell your younger self about money?