I was thinking this morning about habits I developed a bit later than I should have, even when I knew I should have been doing them. These are a few things I thought I’d share and interested if others who are out of their 20s now have anything additional to add.
Edit 1: This is not a everyone must follow this list, but rather one philosophy and how I look back on things.
Edit 2: I had NO idea this musing would blow up like this. I’m at work now but will do my best to respond to all the questions/comments I can later today.
- Take full advantage of 401K match. When I first started my career I didn’t always do this. I wasn’t making a lot of money and prioritized fun over free money. Honestly I could have had just as much fun and made some better financial choices elsewhere, like not leasing a car.
- Invest in a Roth IRA. Once I did start putting money into a 401K I was often going past the match amount and not funding a Roth instead. If I could go back that’s what I’d do. I’m not in a place where I max out my 401K and my with and I both max out Roth IRAs.
- Don’t get new cars. I was originally going to say don’t lease as that’s what I did but a better rule is no new cars. One exception here is if you are fully funding your retirement and just make a boatload of money and choose to treat yourself in this way go for it. I still think it’s better to get a 2 year old car than a new one even then but I’ll try not to get too preachy.
- Buy cars you can afford with cash. I’ve decided that for me I now buy cars cash and don’t finance them, but I understand why some people prefer to take out very low interest loans on cars. If you are going to take a loan make sure you have the full amount in cash and invest it at a higher rate of return, if it’s just sitting in a bank account you are losing money. We’ve been conditioned for years that we all deserve shiny new things. We don’t deserve them these are wants not needs.
Those are my big ones. I was good with a lot of other stuff. I’ve never carried a balance on a credit card. I always paid my bills on time. I had an emergency fund saved up quite early in my career. The items above are where I look back and see easy room for improvement that now at 37 would have paid off quite well for me with little to no real impact on my lifestyle back then aside from driving around less fancy cars.