How many times have you caught yourself saying “If only I’d known then what I know now,” especially when it comes to financial matters? You’re not alone. Whether it pertains to debt, credit or savings, there’s always at least one piece of advice that you wish you’d known 10, 20 or 30 years earlier. As Gail Cunningham, NFCC, perfectly put it, “The truth is that people aren’t born with financial skills. They likely aren’t taught them in school, and their parents may or may not be good financial role models. Financial wellness is learned, and consists of a series of small, smart steps repeated over time.” We wanted to know what piece of financial advice you wish you’d known when you were in your 20s. Here are some of the responses we got.
I wish someone had imparted to me the fact that because all my friends and peers were pursuing educational degrees that did not necessarily indicate education was a good investment. If someone had explained to me that starting a business or learning a trade craft could lead to a noble profession with accompanying financial benefit, I likely would have had a jump start on becoming an entrepreneur.
– Matthew Reischer, CEO, LegalAdvice.com
The advice I wish I had was on compounding interest. It seems so logical now but had I spent a few minutes trying to understand it in my early 20s, I’d be much more financially stable now in my late 30s.
Saving, even a tiny amount a week, is something that would have changed my life for the better.
– Dave Davis, Redfly Digital
I wish someone had shown me the power of compounding and encouraged me to save more. When I was in my 20s I was a young lawyer, newly married. It was in the 1980s and employers were just beginning to offer 401(k) plans. Both my ex-husband and I had the opportunity to participate in a plan and we asked my then-father-in-law, an accountant, whether we should begin contributing. He is a wonder man and I am still close to him, but his advice was wrong. He said not to bother. We eventually did begin to contribute, but not for a few years, and we missed out and a very good opportunity.
– Felicia Garland, Greenberg & Rapp Financial Group, Inc.
The piece of advice I would tell myself would be to only invest in quality people. All ideas have a certain sizzle but it is the people that make it happen.
– Gary Sirak, Sirak Financial, IfYourMoneyTalked.com
What’s the one small step that would have most benefited me if I’d put it in place while in my 20s? Saving. We had our four children in our 20s, and there were many demands on our money, so I fully understand when people say they don’t have any money to save. However, getting accustomed to saving at an early age is a habit that will pay huge dividends over the course of a person’s life.
– Gail Cunningham, National Foundation for Credit Counseling
Think long term. Have patience. Do your research and trust your gut. I tell clients that I’ve lost over $4 million dollars from “greed.” I had 50 shares of stock in Microsoft in 1986 that I sold for a 10 percent profit, and 500 or so shares of AOL in 1993 that I sold for a profit but lost out on much more. Fortunately, I did learn from those lessons and have been able to do more “reasoned” investing since.
– Ilene Davis, CFP(R), MBA
The best financial advice I wish I had received in my 20s would be have enough money set aside for that “rainy day” that will eventually come for all of us. Whether it is because you car breaks down, your toaster burns out, you spill your coffee on your smartphone, etc., unexpected things happen to all of us. What I have done is set up an emergency account that automatically takes $150 a month from the bank account I deposit my payroll check in. I do not ever miss the money and always know it is there for such emergencies. Since such a thing is so easy to do today, as most everybody banks online, I suggest every 20-year-old set up such an automatic withdrawal emergency account. Even if the automatic withdrawal amount is $20 or $50, you will be glad you did.
– Stephen Lesavich, PhD, JD, Attorney, Lesavich-High Tech Law Group, S.C.
In my 20s, I thought I needed “stuff” — books, clothes, record albums — to have a grownup life. Today, I have none of the stuff I collected in those years. I wish I had spent more on experiences because the memories last a lifetime.
– Ruth Stroup, Farmers Insurance
I wish I would have started buying income-producing assets in my 20s. It’s an absolute must to pay off debt, but what do you do afterwards? Had I purchased quality stocks with a history of increasing dividends, I would have a great income stream that requires very little effort to maintain; a great thing to have for all of life’s little surprises.
– Joel Wenger, Invest-Safely.com
Risk is real and it truly exists. It is also measurable. Be careful and make decisions with wise counsel. Sure every now and again you might hit it out of the park, but there can be many strikeouts in between.
– Richard E. Reyes, CFP, Wealth & Business Planning Group, LLC, TheFinancialQB.com
The future may seem far off, but it’s never too early to start creating the life you deserve. The most important thing is to always pay yourself first. Make paying yourself as non-negotiable as paying any other bill, and the payoff will be huge — literally. How do you pay yourself? Invest, invest, invest! The sooner the better. First, start to build an emergency fund. Life happens, and you need to have a cushion in place in case of unexpected expenses. Eventually, aim to have six to eight months’ worth of living expenses set aside. Once you have at least some savings set aside, start investing. Fund your 401(k) or open a Roth IRA. Make it easy on yourself and just set it, and forget it: Use an auto-transfer to send a portion of each paycheck straight into that investment account to build your future.
– Elle Kaplan, CEO & Founding Partner, LexION Capital Management LLC
Building good credit is important. It opens doors. It allows people to say yes to you. It makes life less stressful. It puts you to the front of the line (for an apartment or sometimes even a job). You can buy things effortlessly (e.g. a car). Focusing on it can keep your spending in perspective. It gives you something to focus on that will benefit you your whole life.
– Cyndi Finkle, PracticalandMeaningful.com
I shouldn’t have gotten into so much student loan debt when there were other ways available to pay for college. I ended up with $8,000 in student loan debt in the ‘80s, which took many years to repay. I didn’t realize that there were a variety of ways I could minimize or even eliminate student loan debt but I figured it out in time to educate my own kids.
– Ellie Kay (“America’s Family Financial Expert”), Ellie Kay and Company, LLC
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