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Learning to Manage Your Finances Early

The following is a guest post from Wayne at Young Family Finance, where he writes about the financial challenges for young couples and families, like choosing between daycare or stay at home parenting.

Have you always been responsible with your finances? When did you learn to take charge of your finances? Was it later than you would have liked or have you always been on top of your finances? While there are some who are considered to have been born with a calculator in their hands, most learn to take control of their finances later than they would like. Many individuals and families that I talk to express regret or speak of mistakes that they have made in their finances. Have you ever wondered what makes people change their approach to finances?

Why People Get Serious with Their Finances

As I mentioned, if often (but not always) takes a huge mistake for people to become responsible with their finances. I am sure you can relate. My boss, who is in his mid 40’s often speaks of his financial burden of student loans. He is a well-educated individual, but he is in up to his head with school loans. He not only took out loans for his first masters degree, but also his Ph.D. and 2nd masters.

I know you are wondering why anyone would go to graduate school for 10 combined years, but that is what it took to follow his dreams and secure a job in his field. After graduating from his most recent degree, these bills came due and forced him to change his spending habits. It is stories like these that are all too common. Whether it’s school loans or spending habits, eventually life makes you wake up.

The Earlier You Learn, The Better

When did you become responsible with your finances? Was it when you were in college? Or maybe sometime in your 20’s? If you have ever talked to someone who has drastically changed their approach to finances, I can almost guarantee that you have heard some form of the saying, “I wish I would have started earlier…”

This phrase has a lot of merit to it. Not only does this mean a smaller hole to dig yourself out of (or less debt to overcome), but it also means that you have more years to save or invest your money. If you have ever heard of compound interest, you know that time is on your side with long-term investments. The longer that you have your investments sitting there, the more money you are earning from interest (and then money off of the money). Starting early helps you get ahead. It may even allow you to start building wealth in real estate while your young, providing for an early retirement.

If you are just starting to take control of your finances, just think of the benefits that you are starting now instead of later. You may still wish that you started saving for retirement or other things in the past, but you can only change the future. Focus on what you can do and take pride in the fact that you are on the path to success.

When did you  learn to be responsible with your finances? Do you wish you started earlier?

Crystal’s Comments:  I seemed to be a budgeter from birth.  I was even known to hoard my candy at Halloween to dole it out to myself little by little.  But my biggest piece of financial advice to everyone so far has been to start saving and investing as early as possible – even if that is right now.

FYI:  I worked at a dead end cubicle job from 2005-2011 for about $30,000 per year.  I went self-employed in July 2011 and make between $70,000-$90,000 through blogging, professional pet sitting, hubby's reffing, and our rental home.  If you’d like to start your own site (link to my free step-by-step guide), I highly suggest checking out Bluehost (my referral link with a nice discount for you, PLUS a free custom header banner from me!).  Please contact me any time at budgetingfunstuff*at*gmail*dot*com with questions or just to brainstorm! I’d love to help!
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13 thoughts on “Learning to Manage Your Finances Early

  1. Thanks to my parents, i have been frugal since birth. I worked hard to save my money as a child and I even opened an IRA when I was 8. Money has been a big part of my life for as long as I can remember, and i think I have been better off because of it.

  2. Crystal, I’m like you and feel like I’ve always been careful with my money. I have a grandmother who is very careful with her money and she got me interested in personal finance at a pretty young age.

    I agree with your advice, it’s never too early to start saving. I started saving with my first job out of college and even with that I wish I had saved more while I was single and with no kids. It gets so much harder to save. So now when I look back at my 25 year old self I think, ‘why didn’t you save even more?!’. Oh well. So I guess that was my ‘mistake’. I definitely spend a lot of money in my mid-20s and wish I had saved more. It’s good motivation to keep saving now.

    @moneyforcollegepro – wow, I’m impressed. I certainly didn’t have anything besides a savings account until after college.

  3. Thanks to my mother being horrible with money, I vowed when I was really little that I would never be like her. Sounds depressing but it’s true.

    I never want to have to rely or be dependent on someone else, and I strive to be different and to make something of myself.

  4. @MoneyforCollegePro, Yes, parents can have a huge impact on your finances. I know I am thankful for certain things that my parents taught me.

    @Miss Wallstreet, I am sure it feels great to learn your lesson when you did as opposed to later in life.

    @Notrustfund, that’s a great point. It’s always easier to save before life gets crazy (in a good way).

  5. agreed, the earlier the better. for me financial discipline started at a young age, mostly because of what I observed in my family. unfortunately, many wait until something unfortunate happens, as is the case when we drive fast and watch someone pulled over on the side for speeding. so what do we do? we speed up again once we pass the cop….tsk tsk

  6. I didn’t start managing my finances fully until I had my first job out of college, but I was “serious” about it from that point. I had a little practice in college – my parents paid my tuition and room and board, but I worked a few hours a week and managed my spending and grocery money. Honestly, I’m glad I didn’t start until post-college and that I had a few carefree nearly-adult years. I didn’t get myself into credit card debt or anything so it’s only the small amount of student loans that “haunts” me from that time.

  7. I could not have started any earlier! My parents placed me in situations where I learned very early how to handle money. I was always fascinated with money and the interest generated learning more. Part of my success can be attributed to the early start, but I think it was the exposure to two great business people, my parents. It helped I was interested too.

  8. There are many financial concepts that kids and teens can practice so that they can learn good money management skills and hopefully avoid financial mistakes in young adulthood. Kids and teens can learn to earn their own money, save for short term & long term items, spend thoughtfully, share with charities and perform mini-budgeting exercises with gift giving, lunch money or clothing budgets. An open dialogue about money between parents and child is an excellent starting point.

  9. I think I started becoming responsible around 16, after I got my first “real” job and got a lecture about spending all the money I earned. I resented it at the time, but am so glad now my parents cared enough to say something.

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