26 Financial Lessons I Learned Before My 26th Birthday

1. A little bit of hard work goes a long way

A lot of people put off managing their finances because it seems like “too much work.” Sure, there are some elements of finance that might be hard work, but there’s also a hell of a lot of things that aren’t – writing down your financial goal, creating a budget, setting up a high-interest savings account and signing up for a micro-investing apps like Raiz* or Spaceship* for example. All of these things take less than fifteen minutes to do, but all of them will have a positive impact on your finances.

*Disclaimer: if you choose to use those referral links for Raiz or Spaceship, we’ll both make some free cash money.

2. Budgeting doesn’t have to be restrictive

When most people hear the word ‘budget,’ they freak out. They think that it means they have to give up everything they love in order to save money but, in fact, it doesn’t mean that at all. When I get paid I separate my money three different ways:

a) Fixed expenses e.g. bills & rent
b) Savings/investments
c) I then spend whatever I have left on whatever the hell I want (this is my spending budget)

By prioritising my fixed expenses, savings and investments first, I can then spend the rest of my money however the hell I want without feeling guilty about it.

3. Learning about finance isn’t boring

Honestly, this is something I wish I had known about when I was younger. I used to think that everything finance related was boring and way too complicated for me to understand but recently there’s been an influx of really relatable sources of financial information that make learning about finance fun. Financial blogs like The Broke Generation and Get Woke Not Broke are a really good place to start. There’s also a bunch of podcasts like She’s On The Money and The Shady Economist which are changing the conversation around personal finance.

4. Financial freedom looks different for everyone

We are all working towards different financial goals. Just because I want to invest my money so that I can be a baller in retirement doesn’t mean that you have to want that too. We all have different financial priorities, different goals and a different idea of what financial freedom means to us. That doesn’t mean that one is better than the other, it just means that we’re all striving for different things. You just keep doing you.

5. You’ve gotta be open and honest about your finances

I don’t know about you but when I grew up I was always told that talking about money was rude. I got told that it was rude to ask people how much money they earn, what they spend their money on, what they invest in etc. Here’s the thing though – if we don’t talk about money openly and honestly with the people in our lives, how the hell can we expect to get any better at managing our own money? Talk to everyone you know about money. You might be surprised at how much you learn.

6. A man is not a plan

Ever since I was little, my Mum always drilled this money mantra into my head. She taught me the importance of financial independence. She taught me not to rely on anyone else (man or woman) to look after me financially. Instead, she taught me that if I have a goal to earn more, or save more, I should work my ass off to achieve this.

7. Saving money doesn’t mean you’re cheap

Have you ever told someone that you’re trying to save money only to have them call you “cheap,” “stingy” or “tight?” Yeh, me too. But, here’s what’s up – just because someone is choosing to prioritise saving money to try and hit their financial goals, doesn’t mean that they aren’t generous. It just means that they don’t want to waste their money on stuff that adds no value to their life.

8. Spending should be intentional

Before you make any purchase, stop and think about what that purchase really means to you. When you spend intentionally, you’re far less likely to spend money on shit that doesn’t add any value to your life. Below are some other ways to spend intentionally:

9. The earlier you start giving a shit about investing, the better

I’ve always been good at saving money, but it wasn’t until I was 23 that I actually started giving a shit about building my wealth. I started investing just over two years ago and have already seen an an average return of 10% across my investment portfolio. If I’d started investing even earlier, my money would be worth even more than it is now. So, if you’re thinking about starting to invest, don’t put it off, do it now.

10. Compound interest really is the ‘eighth wonder of the world’

The whole reason I always go on about the importance of investing is because of compound interest. When you invest in the share market, your money compounds which basically just means that it grows without you doing anything. Albert Einstein called this phenomenon “the eighth wonder of the world” and damn was he right.

Check out my fave compound interest article here.

What the hell is compound interest?
11. Micro-investing platforms are the easiest way to invest

I first discovered micro-investing platforms last year and am already obsessed with how easy they are to use. Raiz* is a platform that automatically invests your spare change into the share market. Currently, I invest $50 a fortnight (plus round-ups) into the Raiz* aggressive portfolio. I also invest any spare money I have at the end of my pay period. Since I started investing with the app about six months ago, my portfolio has seen a return of 12.71%.

My current Raiz portfolio balance as of 17/2/21.

I also use the Spaceship* platform to invest my money. I automatically invest $40 a fortnight into the Spaceship Universe portfolio. The best thing about Spaceship is that it is free to use for the first $5000 invested. Over the last year, the Spaceship Universe unit price has increased in value by 53.5%.

*Disclaimer: if you choose to use those referral links for Raiz or Spaceship, we’ll both make some free cash money.

12. Investing is a marathon, not a sprint

I like to think of myself as a long-term buy and hold kinda investor. I mainly buy ETFs because they track the overall share market and have less overall volatility than individual shares. That being said, the overall share market also experiences ups and downs, so it’s really important not to panic when the share market does drop. Check out the chart for the ASIA ETF for example. The overall trend of this ETF is positive in the long-run, but it experiences ups and downs throughout the trajectory of the graph. This is normal, so don’t panic sell when your shares drop a little.

13. Your money mindset is everything

Having an abundance mindset around money is something that I’ve been working really hard on over the past few months. Abundance mindsets were first described by Stephen Covey in his best-selling book ‘The 7 Habits of Highly Effective People.’ He described it as believing that there is plenty out there for everyone, which is the opposite of having a scarcity mindset. With a scarcity mindset, we believe that life is a finite pie and that when someone else takes some of that pie, there is less leftover for ourselves.

Having an abundance mindset around money is really important to me because it makes me less afraid of money. It gives me the confidence to invest in myself, to buy shares, to give money to others and to spend money when I want to because I know that I’m always going to have opportunities to acquire more.

14. Everyone is on their own financial journey

And you know what? That is OK. You don’t have to try and compete with anyone else when it comes to your finances. You don’t have to compete with your friends, your family and you especially don’t have to compete with random strangers on the internet.

15. Delayed gratification is way more satisfying than instant gratification

Last year, I wrote an article about How Instant Vs Delayed Gratification Affects Your Money. Delayed gratification means that you put off short-term pleasure to experience an even greater amount of pleasure in the future.

Take for example if you choose to forgo a $20 a week now for the next 10 years to, instead, invest it into the share market. Sure, you might miss out on one brunch every week now, but in 10 years the $10,400 you invested would actually be worth $14,408*. By giving up a measly $20 a week now, you would experience way more financial satisfaction in the future because your money would be worth way more.

*Assuming no additional investments and an average annual return of 7%.

16. You can’t hang on to past financial mistakes

We all make mistakes. That’s just part of life. It doesn’t matter what financial ‘mistakes’ you might think you’ve made in the past, there’s no reason to hang on to them. Don’t dwell on your debts, or stress about not having started investing, and don’t even worry if you haven’t started saving money yet. Focus on what your mistakes were, make a plan to move on from them and then concentrate all of your energies on moving forward rather than looking back.

17. Life is too short to obsess about money

Don’t get me wrong, I love talking about money. I love earning money, saving money, investing money and knowing how money works but sometimes we have to remember that there is more to life than money. If you become too obsessed with saving and earning money, it can be easy to forget to spend your money in ways you actually enjoy.

18. Superannuation is pretty bloody cool

ICYMI, last year I wrote a whole series of posts all about superannuation. I talked about what superannuation is, why you should make extra super contributions and how to invest your super ethically.

During the time I spent researching super, I came to realise how bloody cool it really is. Super funds invest your money for you. So, if you choose to invest more into your super now, you’ll have more time for that money to grow. That means you’ll end up with a shit tonne more money when you retire. Hence why I now salary sacrifice additional money into my super every fortnight.

19. The gender superannuation gap is real

I’m pretty passionate about superannuation because I think that there isn’t enough information about it for young Aussies. In particular, young women don’t know enough about super. On average, women retire with 47% less super than men due to things like women earning less than men, women taking maternity leave and more women working part-time. How do we overcome this gap? Start building up our super earlier through additional super contributions!

20. Side hustles are great

I used to think that having a side hustle was pretty embarrassing (wtf was wrong with me?!). Having a side hustle is actually the best way to build up your savings, gain control of your finances and establish a sense of financial security. Seriously, if 2020 taught us anything, it’s that we can’t just rely on one source of income in order to be financially secure.

21. But passive income is even better

The only thing better than extra money is when you earn that extra money while you’re doing absolutely nothing. This, my friends, is called passive income. I’ve only recently started to notice the benefits of passive income and I’m so grateful that I have. Some of the easiest ways I earn passive income are by keeping my savings in a high-interest savings account, investing in high-dividend shares, using cash back apps like Cash Rewards* and Shopback*, and selling my merch online.

22. Apps are an easy way to make extra cash

Speaking of side hustles, one of the easiest ways to hustle is through apps on your phone. I use the survey apps Octopus* and Pure Profile* to answer super easy questions in exchange for cash deposited into my bank account. I also complete small tasks on the Field Agent* app and in exchange the app sends money to my PayPal account.

*Disclaimer: if you choose to use those referral links, we’ll both make some free cash money.

Pure Profile sends money you earn from completing short online surveys straight to your bank account.
23. Buying expensive shit doesn’t make you rich

I don’t know who needs to hear this, but buying expensive shit does not make you rich. Just because you drive a fancy car, live in a huge house or wear designer clothes, does not mean that you have your financial shit together. You know what does lead to you becoming rich though? Living within your damn means.

24. You’re allowed to treat yourself (in moderation obvs)

You know what I hate? When people assume that just because you have a goal to save money it means that you can’t stay at nice hotels, or go out for random dinners, or even treat yourself to new things. Getting your financial shit together is all about finding a healthy balance between prioritising your financial goals & treating yourself to things that make you truly happy.

25. Personal finance is not a niche

I read this quote as I was randomly scrolling through Instagram one day and it’s stuck with me ever since. When we think about finance, we often think that it’s only important for financial professionals to understand what the hell is going on, but that couldn’t actually be any further from the truth. Every single one of us deals with money in some way or another every single day, so it’s pretty damn important that we actually understand it.

26. You can never know enough about finance

As much as I like to think I know everything there is to know about saving, investing and money in general, I don’t. The finance world is fkin massive and there is always more to learn about building your wealth. So read all the books, listen to all the podcasts and take in as much info as you can. Your finances will thank you for it.

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The Stingy Bitch

Based in Sydney, Australia.
Created in 2020.

Disclaimer:
This site and all of it’s contents are provided for entertainment purposes only and do not constitute personal financial advice. All products that are mentioned are general product advice only, not personal product advice. Not all options are presented and my opinions are subject to change. All content and posts have been prepared as a general summary only and is not intended to be financial advice with respect to any particular matter. This post should not be relied on with respect to any particular matter. If you have questions about any aspect of the content or this site or otherwise require personal financial advice, you ought to seek financial advice. The author disclaims liability to any person who relies on this post.

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@thestingy.bitch

Published by thestingybitch

A Twenty-Somethings Guide to Saving Money Whilst Still Living Your Best Life

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