I grew up with a definite case of “small-town syndrome” in no-wheres-ville, California. I moved out of my parents’ home and into an apartment in San Francisco, with my best friend from high school, at age 17. My parents were always overprotective when I was younger. I was never allowed to go out to birthday parties, school dances, or even allowed to join sports. They locked me up in our house, and hid the key (metaphorically speaking that is, no need to report my case to Child Protective Services). So when I was finally out on my own I BINGED. I wasn’t used to the degree of freedom to which I was now afforded.
Being in that apartment was my first taste of true freedom. I came from a town where the most exciting thing to do on a Friday night was to hang out at the local Target. When I moved into a city where each block was filled with something new to explore, it was tempting to always spend. Looking back, my biggest regret was thinking incredibly short-term with respect to my finances. I got so wrapped up in having to eat at every ethnic restaurant I could find (“oh, I’ve never had Hungarian food before — I have to go!”), constantly shopping during the times I worked part-time retail, and going to fancy bars during happy hour. In the end, I drained all my money, and I didn’t save a penny of it. It was hard to break out of the mindset of spend every paycheck until the next payday, spend it all, and repeat. However, I’m older and wiser now. In looking back on my situation, I wish I could have told myself these five things that would have helped me plan for the long term.
1. Understand that no one is going to bail you out.
It’s nice to lean on mom and dad when you first finish school and need a place to crash until you’ve landed on your feet. However, it’s another to keep wasting away all your money because you know someone will catch you when you fall. Since a lot of people know their loved ones will help them if they’re truly in need, this knowledge feels like a safety net. BUT, you shouldn’t just expect your parents to handle your problems. That’s what financial freedom means — not having to rely on others to bear the burden of your financial troubles and mistakes. The term “pay yourself first” is one of my ten essential financial commandments. Always make sure you are putting away enough money in case you hit rock bottom. There’s truly no greater feeling than having the confidence of knowing you have your own back.
2. Always look ahead.
When you’re living in that paycheck-to-paycheck mindset, the only thing you can think about is how to get money today. This results in you having to “hustle.” You tell yourself, “I’ll do overtime this week,” “I’ll Uber this weekend,” or “I’ll take on a second job.” It’s great that you’re trying to do as much as you can to afford something rather than put it on a credit card, but is it sustainable long-term? Probably not. What I wish I’d done differently is plan out what was truly important to me, and create concrete steps on how to get myself there.
3. Ask yourself, “Is this what I want in two to three years from now?”
Two to three years is not a long time, whether it’s in reference to clothes, furniture, an apartment, or even kitchen utensils. Sometimes, it’s best to just wait and save up for something rather than buying the same thing over and over again (like fast fashion at stores like Forever 21 — those sales will get you). Remember — every penny adds up. When you’re at the store, it’s helpful to ask yourself if the item you’re about to purchase is something you would want around for the next two to three years of your life. That shirt that says, “Turn Down For What,” is probably not one of those things.
4. Research until your fingers hurt.
Do your research in everything that you do and spend money on. If you want to be a writer, research what typical writers make and what you need to do to get there careerwise. Research tips on how to start out, reach out to someone on LinkedIn or your favorite website, and take them out for a coffee to discuss your desired career path. Really think about whether it’s the kind of lifestyle you want. Smart decisions come from having serious due-diligence. For example, what has made me a smarter shopper is conducting research into everything before I purchase it. First, research the price of the item you want. Then, look at credit card reward programs and coupon codes to make sure you’re making the smartest purchase and financing option possible. Then, research the quality. Finally, research how long the product typically lasts, and read as many reviews as you can. Stopping spontaneous/compulsive shopping is a step forward to thinking for the long term.
5. Decide what is important to you, and stick with it.
You have to subdue that feeling of FOMO, and learn to look at the bigger picture. Something like a cool concert or a new bar opening can be tempting, but you have to keep focused on what is truly important to you. If you want to save up for a house by the time you’re 30, have a specific goal for your emergency fund, or need to save money to eventually go back to school, it’s important to have plans for your money. Write down your goals someplace to remind yourself, place it on the pin board by your desk, frame it next to your monitor — whatever you need to do, do it! If you keep focused it will pay off in the long run. Literally!
It’s easy to get caught up in the present. Especially with a YOLO culture surrounding you when you’re young. But, you have to learn to look past the now, and focus on the future. As they say, “It’s not a sprint, it’s a marathon.” For me, I’m just learning that it’s never too late to take back control of your life and finances. The older I get, the smarter I’m becoming in terms of my long-term decision making ability. Well…at least with money.
Terria is a 9-to-5 working professional living in Austin, Texas. You can generally find her at the gym, in the hot sauce aisle of your local grocery store, or hula hooping at the pool.