4 THINGS I WOULD TELL MY 20 YEAR OLD SELF
While it's part of my truth that I am in Financial Planning, and that I grew up in a family of Financial Advisor's, it is not my WHOLE truth.
The bigger picture of my financial journey is that it took me a long time to connect to my own “why” and really understand how important building good habits early really was.
I had a Life Insurance policy as a child that I took over when I became an adult and when we began our family, we upped our Insurance, got the kids their own policies, and began building up our savings to work towards home ownership and retirement.
By many standards, we did a lot of things exactly the way you’re “supposed” to. However, I didn’t truly understand WHY we were doing some of them beyond trying to achieve a sense of "adulting." If I had been more in tune with what I was TRULY working towards, long term, I would have made some different financial choices.
Everyone’s situation is different and you should always reach out to your Advisor for advice specific to you and your situation… but If I could go back in time and talk to 20 year old me, this is what I would say:
1. That thing that you think you need. You don’t. Look at your bank statement... not everything you see on there is necessary. How much money are you spending on takeout? Clothing? Drinks at the bar? Useless crap that you will lose track of? Try cutting whatever that number is in half, or even by 25% to start, then save the rest.
2. Build a budget. Stick to your budget. For a long time I spent whatever, whenever! It’s a hard habit to break and there are still days/times that I really need to check my ego at the door and let the numbers dictate what I can ACTUALLY spend on something. That means saying no to myself more than I like - a discipline that is a constant work in progress for many people. 20 year old me really had no clue what was coming and going and would generally subscribe to the idea that as long as there was enough in the bank on the 1st for the rent cheque to clear then I was good to go!
3. Buy that tiny starter condo. My now husband and I met when I was in my mid-twenties, quickly became parents and then just as quickly moved to Downtown Toronto. Saving towards a starter home for our growing family in Toronto was a MISSION given just how much we needed for a down-payment in that market and as a result we became homeowners later than we had expected we would. I wish 20-year-old Ashley took saving more seriously and better understood how important it would be down the road to get into a place that you own as soon as possible. We got our house when I was 30, and I think about the difference of paying rent for those ten years, when I could have been paying a mortgage… I reflect on our goals now and what that extra 10 years of equity could have meant for them, and I can’t help but kick myself a bit for dropping that ball.
4. Investing works best when you start it early. I know this. I KNEW this. We all do. It’s a very simple concept but can be hard to put in to practice when you are young, and most/all of your money goes to “fun”. You think there is always time to settle down, be more responsible, save, invest… etc. Well, time goes a lot quicker than you think and the sooner you start, the more time you have to let that compound interest work its magic! If I could go back, I would make sure that 20 year old me started that investment portfolio. Nothing crazy, but something consistent and manageable set aside and invested every month.
I am much more in tune with my WHY now… and, ironically, it’s something my Dad always said that I never fully understood until the last few years:
“Its not about the money itself and it shouldn’t be. It’s not about that number in your account, whatever that number may be. It's about the freedom that it brings. Money to me represents choices, and when I think of it that way, I want to make sure that I’m setting myself up to have choices at every stage of my life so that I never have to feel stuck.”
Every person has their own journey and learns lessons in their own time and in their own way. People also generally don't change behaviours because they are "supposed" to or they are told to - they change when it becomes a priority for them.
There were a lot of voices that helped to shape my current mindset and help me realize just how important it is to have a plan. I share my experience and the lessons I learned on the chance that maybe I am one of the voices that helps you on your journey.
To all the “20-year-old Ashley’s” out there, your future self will thank you for making those financial sacrifices, setting a plan, and working to reach those milestones sooner than later. I promise you.
Freedom 55 Financial
Quadrus Investment Services