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Financial advice I would give my 25-year-old self

6 min read
19 Sep 2016

If you could go back in time and visit your younger and slightly unwise self, what advice would you give them about money?

Does your future advice include saving more, setting up a budget or not making money too important? Whatever it is, I’m sure everyone has a piece of advice they would bestow onto their younger selves.  Throughout your life, you have probably learnt many life lessons, met new people and settled into several job roles. Maybe you were a student, teacher, business person, intern, boss. Or perhaps your role was focused on people rather than a job title like being a husband, wife, mother, son or friend. As you begin another new year, you may reflect back to those times and wonder about the missed opportunities and difficult lessons you had to learn along the way, both emotionally and financially!

While we can’t turn back time, we can still impart our wisdom that has accumulated over the many years to others and even begin making a few changes to our lifestyle ourselves! It’s never too late to get your finances and money goals back on track. Jen Bakker, Head of Customer Engagement for MoneyBrilliant shares her experiences with money and how her perceptions about investing and saving have significantly changed.

If you go back in time, what would be some of the financial advice you would give yourself?

Looking back to my 20’s, I think I definitely would have had a few pointers that I would give myself in terms of superannuation, buying my first house, savings and budgeting.

I think I would put a little bit more in superannuation as soon as I had my first job, even if I stopped salary sacrificing after a couple of years. I now know that the power of investing for over 50 years is incredible!

When I bought my first house, I wish I had looked at repayment calculators to see how an extra little bit of repayment made a big difference to the interest paid over the life of the loan.

I also wished I have taken savings out on payday and put it somewhere I couldn’t touch, perhaps in managed funds or shares. I do think putting some money away for a rainy day is so important and something I wish I did more of!

I would finally tell myself to write a budget and break everything down to my pay period. I would allocate spending money and then when it’s gone, it’s gone, tough.

Is there anything in particular you wish you had known growing up and managing your money?

I think overall, I wish I’d known more about the different options for investing my money when I was younger. I’ve only really explored those options when I got older and didn’t take into consideration that I could actually invest my money for the future. I think the younger generation of today needs to start educating themselves on investing and saving more; we tend to spend without really thinking it through.

What lessons have you learnt over the years financially?

I’ve always spent less than I earn, but I’ve learned to increase the gap and be smart about what I do with the money that I free up. I’ve learnt a number of things through this such as:

  1. How to prioritise
  2. Never paying interest on my credit card
  3. Paying high interest debt off first credit card
  4. Paying off debt before building my savings
  5. To always diversify

I’ve also learned that sometimes, you may think you need to access your stash of money that you had for a rainy day (like an emergency fund) but you actually don’t necessarily need to do use it. If you manage not to use your “rainy day” savings, most of the time you’ll get through your situation without it and you’ll still have your emergency money there that will be used for a bigger cause.

How has general financial advice changed over the years?

I think the way people access advice in the last few years has changed and I think that will continue to evolve. The availability of education on the internet now allows consumers to be better informed about their money decisions. The complexity of it will often still mean the advice is valuable and interesting but different to how it was presented in the past. I’m not sure if the types of money advice has changed over the years, but I do believe that the financial recommendations that people make have evolved to encompass more in depth financial tips.

What is the number one thing you believe the younger generation should learn about finances?

The number one thing I think people need to learn is to talk about money.

People get themselves into bad positions with their finances and feel that they can’t talk about it with family and friends, which only makes things worse. Learning at a young age to talk to loved ones and ask questions about money might alleviate some of the financial stress that people feel today. Communication is key!

Other than that, learning to budget is extremely important and something we don’t do enough. With many people living pay to pay, being able to spend less than you earn is a life changer! We need to begin writing down what we earn, what we keep and how much we save over time.

Do you believe your attitude on saving and money management has changed?

My attitude towards money has definitely changed over the years. I’ve particularly noticed a change in the last twelve months since I’ve been working in finance. Looking at my money expenditure every day and having it grouped into different spending categories shows me very clearly where I am using my money and where I could potentially cut back.

In the last twelve months, I’ve noticed a number of things change like my grocery bills reducing, my negotiating skills improving in terms of bringing interest rates down and an increase in switching insurance providers. I managed to save $850 per month in my utility bills which I found quite incredible! This was all from having a change in attitude as I got older and becoming more aware of what things cost. I eventually became mindful about discretionary spending.

Before all this happened though, having a mortgage and having children changed things. The amount left at the end of the pay period got smaller, so we needed to learn to adjust to that change. I know people who haven’t adjusted, and they end up spending more than they earn and get caught in a cycle of debt. I think in the end, no matter what you used to do in the past and the financial advice you received, you have to adapt to your lifestyle changes and situation constantly.

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