I thought about writing a letter to my younger self for a while. I’ve made many mistakes over the years and sometimes wish I had a do over.
But at what age would I get this letter? 18? 21? 25? Would I even be mature enough to handle it? Obviously I think a lot differently at an almost 40 years of age than 18 or even 25. Would I come off as too omniscient? Would I sound like I’m talking down to myself?
What things would I have changed and what would I have like to stay the same? I mean, I am who I am today because of my past, but that doesn’t mean I wouldn’t like a do over from time to time.
Dear Stacking Dollars,
It’s your future self-writing you to help you with some personal finance things you are going to experience over time. I know you’re not in the mindset of hearing another authority figure telling you what to do. That’s fine. Just keep this letter on you and refer to it from time to time, especially when you feel like your money isn’t coming together.
The first thing and most important thing I can tell you is that you will always need cash. Period. Something is always coming up. This is guaranteed. You’re driving your mother’s old car and it will need repairs and maintenance. My advice to you is to keep up with the maintenance to prevent future problems and side some cash to the side to take of these future problems.
Also, keep this car as long as possible. Don’t bother trading it in for a more up to date vehicle. You’re taking on payments better suited to getting your financial footing established. Money in the bank is much more important than a late model car on the street.
Saving $25 or $50 every time you get paid is a start. Yes, I understand you’re not making enough cash right now. It builds up over time and it’s a good cushion to have something to fall back on instead of stressing about having the cash to fix your car.
Second, examine your expenses. You like to hang with your friends at the clubs and bars. You like to take girls out on dates. Plus, you got to eat. Write all these things down and see how much you’re spending on each category. I know, having a budget sucks. You think you know what you’re spending on, but yet you’re always short of funds. I bet you find that $50 a paycheck you need to set to the side by examine your spending habits. This will help you learn to do with out and putting priorities ahead of anything else. It’s part of being an adult.
Third, do not get a credit card and start charging things on it. It takes forever to pay it off. In fact, it took several years to get your credit card debt under control. Don’t buy things you don’t need – that gets you nowhere. Paying that debt means you have to take what you made today and put it towards something put bought yesterday. That’s a backwards move.
Lastly, come up with another $50 to invest in a mutual fund. You’re young and so math works so that by the time you’re my age, you’re setting pretty. As you make more, you can invest more as you grow in years. With the fact you’re keeping your expenses low and not taking on too much debt, you’ll have a good amount of cash to invest that will be there in the future.
Cash is king in this world and you’re going to need it. Treat every dollar you make as something that shouldn’t go wasted. Of course, hanging with your friends are great experiences to have, but don’t overdo it. Stick to a budget. Having cash is a priority. You’re going to lose your job a few times. And guess what? Your bills don’t take no having a job as payment.
I know your attention span at your age is limited so I’ll leave you be. If you get nothing from letter remember this: Cash is king and you’ll always have need for it, therefore is best to have some saved up.
You’re Future Self