This undated file photo from NerdWallet shows Liz Weston, a columnist for personal finance website NerdWallet.com. We’ve all seen novice speakers giving advice to graduates when they’re about to enter the workforce. Likewise, financial professionals are in a unique position to offer financial advice to the younger generation. (NerdWallet via AP, file)
Those of us who write and talk about making money for a living do our finance work together. But that’s not always the case. I invited some personal finance experts to share what they would like to tell their little ones about money.
Invest early, even if it’s scary
If the stock market scares you, Washington Post columnist Michelle Singletary can empathize. Singletary says he avoided investing for many years because, at his first job out of college, an older colleague – who was nearing retirement age – warned him stocks were too risky.
Singletary later realized that someone in their 20s had decades to break out of stock market swings and that she could take too much risk with her investments.
“The lesson I learned was to look at my personal situation and invest based on my schedule and goals,” says Singletary.
Pay off student loan debt
Darian Woods, a reporter and producer of the podcast “The Indicator from Planet Money,” says he doesn’t remember exactly how much he borrowed from the University of California, Berkeley to get a master’s in public policy — only still on his balance. By the time he graduated, he had “tens of thousands of dollars.”
The debt was huge. Woods wishes he could reassure his troubled young self that the loans were a sound investment in his future. Woods, a native of New Zealand, took a job as an analyst at his country’s Treasury Department and was able to repay the loan within a year.
“This debt wasn’t as albatross as I feared,” says Woods.
Saving, spending, earning: all this is important
Paco de Leon, author of Finance for the People: Getting a Grip on Your Finance, has two pieces of advice for your younger self. The first is to save no matter what. Saving on a small income might seem pointless, but the amount you save is far less important than the saving habit you develop, she says.
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Second piece of advice: deal with your pain.
De Leon graduated with a degree in finance and a minor in economics. But a head full of knowledge about the concepts of money was no match for de Leon to have “an ingrained scarcity mentality” and a deep sense of inferiority complex. De Leon says she didn’t make enough for years because she wasn’t sure of her own worth and bought expensive things she couldn’t afford in hopes of gaining recognition from others. She wished her younger self had spent time in self-reflection and therapy to process her psychological issues.
“Work on healing your pain so you don’t create more unnecessary problems for yourself,” says De Leon.
don’t work your life
Tess Vigeland is the host and executive producer of The Wall Street Journal’s podcast “As We Work.” She, too, has both practical and philosophical advice for her younger self.
Practical: Never carry a credit card balance with you if you can avoid it.
“I got into deep debt in my early and mid-20s,” says Vigeland, because I lived like my parents’ bank account, when in fact I only had a tiny fraction of it. “
Philosopher: Develop interests outside of your job.
Vigeland loved his work on public radio – until he did it. In 2012, she abruptly quit her job as the host of American Public Media’s personal finance show, Marketplace Money, with no idea what she wanted to do next.
Part of that journey became a book called Leap: Leaving a Job with No Plan B to Find the Career and Life You Really Want. But Vigeland says life after public radio would have been easier if her work hadn’t been such a big part of her identity.
“People love being outdoors for a living,” says Vigeland. “It helps across the board when you decide to take the leap into a different career or go back to school — you won’t get lost in just one idea of who you are and what you’re capable of.”
and my two cents
Most of us can look back to our younger selves and see how mature we have become over time. But somehow we feel like our growth has stopped. Whether we’re just starting out in the workforce or long-retired, the so-called “end-of-story illusion” assures us that not much will change about who we are today.
If I had known about this psychological quirk, I might have worried less about figuring it all out and making the perfect career and money swap. Who I am and what I want will not stay the same. I would tell my younger self that it’s important to do my best today and take care of myself tomorrow.
(Spoiler alert: it all works.)
This column was provided to the Associated Press by personal finance site NerdWallet. Content is provided for educational and informational purposes and does not constitute investment advice. Liz Weston is a certified financial planner and columnist at NerdWallet, author of Your Credit Score. E-mail: [email protected] Twitter: @lizweston.
NerdWallet: Personal Finance Defined: The Guide to Maximizing Your Money https://bit.ly/nerdwallet-personal-finance-defined-the-guide-to-maximizing-your-money
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