4 Unexpected Money Lessons I Learned From Becoming A Licensed CPA


Does anyone remember those personal finance classes we took in school? The ones where the teacher explained the importance of balancing a checkbook or the power of compound interest? Oh, that’s right.

Those classes did not exist.

Luckily, we can rely on financial experts to guide us in the realm of personal finance. Some even have fancy titles such as Chartered Financial Analyst (CFA) or Certified Public Accountant (CPA). They have all the answers, right?

Well, as a CPA myself, I’m here to share some of those trade secrets and to pop the bubble on what they teach us.

My first business school class on finance sparked something deep inside me. Over the following 12 months, I would pick up a biography of Warren Buffett and start reading anything and everything relating to finance, economics, and of course, accounting. Accounting is what I ended up focusing on and, after college, I took the tests to become a licensed CPA.

Becoming a CPA is no easy task. Depending on the difficulty of the exam, the pass rates range between 45% and 55%. There are four exams altogether, so there are many nights and early mornings spent studying.
To put it simply, there is a lot of studying required, and a lot of dry business knowledge that you have to absorb.

Here are four things I learned from becoming a CPA, and how they affected my understanding of personal finance.

1. Personal finance was a topic to explore on your own, not in the classroom.

Despite the amount of material we covered, the topic of personal finance never came up. We never had to study the impact that credit scores have on mortgage rates, or how saving 11% of our income instead of 10% of our income translated to retiring two years earlier.

Don’t get me wrong: I’ve had to deal with my fair share of interest accruals, but I learned to do it from a corporate or partnership perspective rather than from doing my own finances.

2. It’s best to look at your own personal finances like a business.

Becoming a CPA taught me how to view my personal finances as a business. I now seek a higher profit each quarter and I ignore the market valuation of my stock price — in other words, my net worth.

By optimizing my budget, I’m able to build assets while reducing liabilities. I can identify leaks in my structure and reorganize my cash flows to be tax-efficient.

Plus, it helps to not take my things too personally, or get too hard on myself about my spending. When I slip up and make a big purchase — let’s say a nice bottle of whiskey — I can allocate that to the cost of doing business.

3. Just because you work with money, it doesn’t mean you’re good with money.

Becoming a CPA also helped me see how society automatically assumes someone in my position would be good with personal finance. Society today views people in my profession as being inherently good with money. I find that ridiculous, since I know my fair share of CPAs who are still living paycheck to paycheck.

With the way our society is structured today, we often view people as “rich and successful” based on their displays of shiny toys or their career choices. Luckily, books such as The Millionaire Next Door: The Surprising Secrets of America’s Wealthy teach us that millionaires are more often driving used cars than the imported luxury models.

Being aware of this has helped me to identify true experts when it comes to financial advice. The truth is, having letters representing credentials behind your name does not guarantee that you have my best interest at heart.

4. It’s important to educate yourself outside of your career.

I continue to learn about personal finance from books and blogs, because my professional career isn’t teaching me anything about how I, personally, should handle my money. After all, if we spend 2,000 hours a year earning money, shouldn’t we spend a few minutes each week learning how to manage that money?

 Image via Unsplash


  • Violaine

    It’s interesting but now I want to know more!
    You wrote “By optimizing my budget, I’m able to build assets while reducing liabilities. I can identify leaks in my structure and reorganize my cash flows to be tax-efficient.”
    What does that mean? I mean, really: what do you do differently from me? How do you manage your finances, in a concrete way?

    • Matt @ Distilled Dollar

      Hi Violaine! Thanks for the comment. While I can not say what I do differently from you, as I don’t know your situation, I can clarify what I am doing. I write much about it on my blog but I’ll try and give you the cliff notes here.

      My first year out of college I utilized the Retirement Savings Contributions Credit. So in effect, I lowered my cash buffer to below 3 months and received a big refund check a few weeks later, all while reducing my effective income tax rate to 0%.

      The next big change I did that I don’t see many young people take is, I decided to accelerate my 401k contributions before I accelerated my student loan payments. This meant I was again reducing my tax burden, increasing my assets at a rate higher than the decrease in liabilities would have been, AND I further cemented the habit of investing early.

      The last big one that is relevant is I plan on utilizing an IRA Contribution Ladder in early retirement years (think 55 when my income is then reduced to 0) which means I’ll be able to convert the money over penalty free AND with a low tax rate (think first 20-30k of income). The 2nd option that I might even tack on to withdrawal money penalty free is what’s called a 72(t) distribution.

      I focused on hitting the “tax-efficient” part of your question, but there are dozens of other approaches I’m taking to optimize my budget (such as move closer to work so I don’t need a car).

      I hope that helps!

  • Teri

    Please share any personal finance books you would recommend!

    • Matt @ Distilled Dollar

      Hi Teri!

      For book recommendations, my number one is a short, 20 minute read from Ben Franklin called The Way to Wealth. You can find a pdf version online by Googling, the title + pdf. I know it is a bit old, but the wisdom back then is the same as it is today. It also helps to know (it was news to me at the time) that Ben Franklin worked as a printer for 20/25 years and retired early at age 42. THEN he went into politics and science.

      So, this book is something I highly recommend to anyone, especially in their 20s or 30s if they’re looking to gain financial security in their 50s or (like Ben) in their 40s.

      For other books, I enjoyed reading The Millionaire Next Door and the Richest Man in Babylon. Depending on your background, I might recommend a different book, but I’ve found these 2 to be universally respected.

  • Lauren

    Great article! My father is a CPA and excellent with personal finance, something he has passed on to me, which makes me very fortunate. When I got my first summer job and they handed me a tax form, it was great to have someone who knew what he was doing help me fill it out. It’s an incredibly useful job for a parent or spouse to have. lol