Ever felt overwhelmed by fear of debt, to the point where it's clouded your perception of yourself? You're not alone. My own dread of debt kept me credit card free throughout my 20s and shaped an unsettling narrative of personal worth tied to financial debt.
In this engaging episode, we'll redefine debt, not as 'good' or 'bad', but as neutral that, when understood and handled strategically, can be a powerful tool irrespective of your age or stage in life.
Retrospective insights from my 20s form a significant part of the discussion; from the pressure of maintaining a 'fashionable' image to learning the art of declining unnecessary expenses.
Remember wanting that swanky apartment but couldn't afford it? I had the same desire, but chose a budget-friendly apartment instead – a decision that has paid off.
Whether you're just starting out on your financial journey, or seeking to improve your financial knowledge later in life, this episode's candid anecdotes and valuable advice are sure to equip you with a fresh perspective on debt and the importance of saving for retirement.
Ever felt overwhelmed by fear of debt, to the point where it's clouded your perception of yourself? You're not alone. My own dread of debt kept me credit card free throughout my 20s and shaped an unsettling narrative of personal worth tied to financial debt.
In this engaging episode, we'll redefine debt, not as 'good' or 'bad', but as neutral that, when understood and handled strategically, can be a powerful tool irrespective of your age or stage in life.
Retrospective insights from my 20s form a significant part of the discussion; from the pressure of maintaining a 'fashionable' image to learning the art of declining unnecessary expenses.
Remember wanting that swanky apartment but couldn't afford it? I had the same desire, but chose a budget-friendly apartment instead – a decision that has paid off.
Whether you're just starting out on your financial journey, or seeking to improve your financial knowledge later in life, this episode's candid anecdotes and valuable advice are sure to equip you with a fresh perspective on debt and the importance of saving for retirement.
Tracking is like watching the game while budgeting is playing in it. You need both to score, so sure. Find a way to monitor your income and expenses that fit your lifestyle, whether it's an old school paper and pencil, a handy app or a software like Quick-In but pair it with a solid budget. Hey, this is Allison, and welcome to the Inspire Budget Podcast where we talk all things budgeting, debt and saving money. When you're 20 years old, you tend to believe what other people tell you, and that was especially true for me. When it came to money, I believed whatever someone told me. Part of that was because I honestly didn't know much about money at the time, and part of it was because I also didn't care enough about my financial future to do any research myself. I know, I know not the smartest move, but I generally didn't care about money. In my 20s. I honestly figured that if I didn't go negative in my bank account, I was fine. As long as I could make my minimum payments on everything and live the lifestyle I had, I was perfectly fine. I wish I could go back and shake that 20 year old version of myself and yell wake up. This is your future. You should care, even if it's just a little, but I can't, unless you have a time machine hidden in your closet. If that's the case, then please shoot me an email. But until then, here are eight things that I wish I knew about money back in my 20s. I'm wondering if you and I share any of these. The first is that debt is neutral. One thing I was told when I was much younger was that there is good debt and bad debt. Student loans were smiled upon and affectionately awarded the label good debt. I'm guessing people figured it was good to have student loans because it meant they were getting a college degree. But what if I had dropped out of college? Would that have still been good debt? And at what point did good debt suddenly become bad debt? And what does it mean about me if my debt was bad? I'll be honest about one thing my fear of debt definitely kept me away from credit card debt in my 20s, and for that I am so thankful. However, my fear surrounding debt entirely gave me this warped sense of debt and what it means about me as a person if I have debt. Does having debt make someone irresponsible? I mean, what if that person used credit cards to pay for their electricity bill because they had lost their job and needed to keep the lights on. Does that make them bad with money? After years of being in a very unhealthy relationship with debt and what it means about me as a person, I've settled on one thing for sure Debt isn't good and debt isn't bad. Debt is neutral, gosh. Isn't that a relief?
Speaker 1:
Debt is simply a financial tool. Much like a hammer can be used to build a house or break a window, debt is a tool that can be used for various purposes. It's not the tool itself that's bad or good, but it's how it's used that determines its value. A mortgage can help someone secure a home. A business loan can help an entrepreneur grow their company.
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The intention behind taking on the debt is what's crucial. Debt does not tell the full story. It doesn't disclose why a person took on that debt or the circumstances that led them to that decision. As mentioned earlier, someone may have to use a credit card to pay for their utility bill during a rough patch. That very same credit card might be used by another person to fund an impulsive shopping spree. The same tool, different scenarios. So just because you have debt, it doesn't mean you're irresponsible or unworthy. Everyone's financial journey is unique and setbacks can happen to anyone. It's not the presence of debt, but how you manage and approach it that speaks volumes about your financial maturity. So it's time to shift our mindset and stop labeling debt as inherently good or bad. Instead, we need to recognize it for what it is a financial tool and, like all tools, its effectiveness depends on the user. By understanding and respecting its power, we can use debt strategically and minimize its potential pitfalls. Remember, debt does not define you. It's neutral.
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The second thing I wish I knew about money in my 20s is that it's important to start saving for retirement now. Yes, now. In high school, my brother had this friend. His name was Simon and he worked at a local gardening store. Now, while most of us, like me, were eyeing the latest fashion trends, he was proudly funneling a significant portion of his paycheck into his 401k at the age of like 16 or 17. I remember him bragging about this and I was baffled. I was thinking why are you stashing away your money for some crazy future that is not even on the horizon? Wouldn't it be spent better on cute clothes or going out with friends? But even at the age of 16, he had foresight which is crazy to me to prioritize his long term financial well-being over his immediate gratifications.
Speaker 1:
Now, it wasn't until I embraced motherhood that the importance of retirement savings dawned on me. Suddenly, with two kids to take care of, I found myself thinking wait, I'm an adult now. Isn't this the time adults should start saving for our future? Looking back, I wish that the magic of compound interest had caught my attention at the age of 22. Whenever I really started bringing in a paycheck and could truly start maxing out a Roth IRA and still enjoy brunch every weekend. But, in all honesty, concepts like Roth IRAs, compound interest and retirement savings or investing for retirement were far from my mindset at the time. I can't go back and change that, but it's definitely something that I wish I had learned about sooner. And if you're sitting here thinking, hey, I'm not in my 20s, but maybe I'm in my 30s or my 40s and I still feel like I'm putting off retirement, then I want you to go back and listen to episode 120 about investing while paying off debt. It'll give you an idea of how to start investing even whenever you're in debt or working towards other financial goals, and the power of investing sooner.
Speaker 1:
Now the third thing that I wish I knew about money in my 20s. I'm honestly a little bit embarrassed, to admit, but I'm going to go ahead and go out on a limb here, get a little bit vulnerable and hope that you don't judge 20 year old Allison, and that is that your clothes aren't the center of attention and no one really cares what you're wearing. Oh my gosh, fresh out of college the 22 year old version of me I was drawn to the allure of these upscale mall stores. I dreamt of a shoe collection with 30 beautiful pairs of shoes and a wardrobe that felt limitless and deep down, I believed that the right clothing, the right attire, the right outfit might earn me my validation from others. It wasn't just about fashion. It was an attempt to cover up a lot of insecurities and that attempt, I believe it, has led to some of our New Yorkers wanting to cover up with this kind of challenge in making money meant buying clothes, and buying clothes meant spending money that I honestly could have been sending elsewhere. I'm not gonna lie to you, I'm not gonna sugarcoat it.
Speaker 1:
I had a shopping problem and a lot of that came down to buying things that filled up my closet. However, as I aged, as I became more mature and started recognizing my spending patterns, I realized that other people were not Focused on my clothing or fashion choices. Everyone else was engrossed in their own lives, their own choices, their own anxieties and their own insecurities. Looking back, I wish I could guide my younger self to more, maybe budget-friendly stores and advise her to curate a more minimalistic wardrobe, because, in truth, the abundance of outfits I owned wasn't necessary. Most people weren't even noticing, and I was in a pretty rough financial spot Partly because of my spending on unnecessary things like clothing. So that's one thing I wish I knew about money in my 20s is that your clothes aren't the center of attention, so stop buying so many of them. The fourth thing I wish I knew about money in my 20s was the art and Ability to say no.
Speaker 1:
Now I think it's clear that I spent a lot of money when I was in my 20s, especially my early 20s money that I didn't need to spend and money that I sometimes didn't even have. Most of the time, it was because I had no idea how to use the word no. I Hated feeling like I was missing out as a very extraverted person. The idea of missing out on something made me cringe. So I would say yes to every Invitation, even if it wasn't in my best interest to go to this, from traveling to eating out all the time I was there. Sometimes I'd go to places when I didn't even feel like it all, because I had no idea how to say no To myself and no to other people and not upset them. Now, over the years, I've learned to put my health savings goals, myself and my family first.
Speaker 1:
I have learned a lot of kind ways to say no to spending extra money. Here Are a few of my go-to ways to kindly tell someone that you're not interested in spending that extra money. You could always say thanks, but I have other plans at home tonight, maybe next time. Or if someone invites you to something and you know you don't have the money to go, you could always say you're so kind for inviting me, but right now I can't fit that into my schedule. But maybe in the future. You could always say I'd love to, but I'm focusing on a few financial goals that I've set for the month and if you're sitting here thinking I don't want them to know that, then you could always just say not today, but thanks. I feel like it's sometimes difficult to flex that no muscle, but it's very important to know how to say no to things that aren't serving you financially or personally. So I wish I had learned to do that better when I was in my 20s.
Speaker 1:
The fifth thing I wish I knew about money was that it is okay to skip the fancy apartment. After college, I landed in Dallas and immediately had this picture in my head of living in this trendy uptown apartment just a short walk from my favorite spot to brunch. But here's the thing the rent for those places were coming out to about half of my take-home pay on a teacher's salary, and the math just didn't work out. And even though I really wanted to be in that area, I had to be practical. So I did end up in this decent apartment, a safe apartment in a not so trendy neighborhood, and, looking back, it was the right move. It wasn't the move I wanted to make, but it was the right one, and what I've learned is that it's okay to not have the fanciest things or live in the fanciest place right off the bat. The key is making sure whether you're safe and whether you can actually afford the rent payment. For me in my 20s, the truth was that there was always time for that dream apartment later on.
Speaker 1:
Today's episode is brought to you by my budget to build wealth. Here's the truth. I do not believe Actually I refuse to believe that wealth is just for the rich. I believe that wealth can be built on a budget without sacrificing what you love to spend money on. I fully believe that budgeting is the quickest, most effective way for you to reach your money goals. So, whether your goal is to stop living paycheck to paycheck, pay off those student loans that have been hanging over your head, or find room in your budget every single month so that way you can start investing for your future, you're going to need a guide, a plan to get yourself there, which is exactly what I'm sharing in my free training budget to build wealth. In this training, I'm gonna be sharing three massive mistakes that people make with their budget and their financial plan, so that way you can avoid them. I'm gonna be sharing with you the secret to freeing up more money in your budget each month, so that way you can send extra money to your goals, and I'm going to be sharing with you my tried and true four step framework to budgeting your way to wealth without giving up what you love. Plus, there is a very special free gift for anyone who stays until the end. You can sign up by going to inspiredbudgetcom slash class or just click the link in my show notes. You'll be able to choose a time that works for your schedule and I'll see you there.
Speaker 1:
The sixth thing I wish I knew about money in my 20s is still one that I struggle with to this day, and it is that meal planning is essential. Now, I don't know about you, but I can drop some serious money at the grocery store, especially if I just walk in with zero plan and back in the day, that's exactly what I did. I thought meal planning when I was in my 20s and I was single, had no kids, or even when I was dating my husband. I thought that meal planning was for families with packed schedules, not for someone single and with all this time on my hands like me. No, so I would hit the grocery store and I would fill up my cart to the brim with frozen meals, snacks and anything else that caught my eye, and I would easily, in the year 2010, drop $150 every week at the grocery store just for me alone, and that doesn't even count all the times I was going out to eat, which was a lot during the week and pretty much every meal on the weekends. If I had literally just sat down before I went to the grocery store and made out a rough plan it didn't even have to be a detail plan, but a rough plan of what I actually was going to eat and what I actually needed to buy I could have slashed my food spending. Looking back at the time and the year 2010,. I did not need to be spending $150 a week on one person. I honestly could have gotten away with $50 a week or $75 a week. I could have literally cut my grocery bill in more than half. I could have been taking that extra money that I was saving and actually save an emergency fund, because at the time of my 20s I only had $200 in savings. It's funny how I once saw meal planning as something that was only for these super busy families or adults, and now I know that being intentional with your meals allows you to be intentional with your money.
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The seventh thing I wish I knew about money in my 20s is probably one of the most important. It's that tracking your money isn't enough. In college, my mom got me into the habit of tracking my finances, starting with Microsoft money. These days I use Quicken to track my money, and I've been using it for oh my goodness, more than 15 years. But for a long time I thought that just tracking my spending was enough. I thought that just writing down where my money was going would be fine. What this meant was that when I was in my 20s, I knew when I was scraping the bottom of my account. I knew the days when I would have just barely $2 left in my checking account before the next payday roll around. I was acutely aware of my paycheck to paycheck lifestyle. But here's the thing just watching your money, just tracking your money, isn't enough. Tracking your money is great and all, but without a budget, you're basically just watching your cash flow out of your bank account without really any control and intention. Think of it this way tracking is like watching the game while budgeting is playing in it. You need both to score so sure. Find a way to monitor your income and expenses that fit your lifestyle whether it's an old school paper and pencil, a handy app or a software like Quicken but pair it with a solid budget. Only then can you really start steering towards your financial goals. Remember, you need both a budget and tracking to get a clear financial picture. Now, of course, I saved the best for last.
Speaker 1:
The eighth thing that I wish I knew about money in my 20s is to not let money define you. In my early 20s, I was convinced that my worth was directly linked to my income. I'm not happy to omit this, but as a teacher earning a modest salary, I felt trapped in a financial loop of perpetual struggle. When I married another teacher, I thought well, I guess financial success just isn't in the cards for us. But a mindset shift for me changed everything. I realized that if I kept telling myself that money was this insurmountable obstacle, then that would be my reality. Instead, I chose to believe that my family could change our financial trajectory, even with our combined teacher incomes. I refused to let whatever amount I was earning set our limitations. So my husband and I set out with this determination to design a financial future we desired on the income we were making.
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Now here is a twist in this episode. While I wish I knew all of this information in my 20s, I honestly believe I wouldn't be in my current position without those earlier financial stumbles and struggles, those challenges. What I went through pushed me to my tipping point, igniting my passion for budgeting. That very passion led to this, led to me building a business, creating inspired budget, and it's the result of years of grappling with these financial misunderstandings, followed by a profound urge to turn things around. So, in a strange turn of events, I'm actually thankful for all of those things. The bottom line is that, reflecting on my younger years, it's clear that the lessons I learned about money have been transformative in my life.
Speaker 1:
Money management isn't just about dollars and cents and math, but it's more about mindset, discipline and understanding the true value of financial freedom. These eight lessons, or these eight things that I wish I knew about money sooner, have not just shaped my relationship with money, but they have guided my life's journey, turning obstacles with money in my life into stepping stones and helping me create inspired budget from personal experiences. So for anyone navigating your financial path right now, remember this it's never too late to reevaluate your relationship with money. Your past does not dictate your financial future. Your actions today do so. Embrace the lessons, seek guidance and always remain passionate about creating a secure financial future for yourself and those you love. After all, the true wealth in life isn't in our bank accounts, but the wisdom we accumulate and the difference we make.
Speaker 1:
Can you do me a favor real quick If you enjoyed today's episode, can you just go back to whatever podcast player or podcast app you're listening to this on and can you just leave a rating and review? This helps my podcast reach new listeners and, honestly, I love and look forward to reading every single review that is written on my podcast. In fact, I'd love to highlight a recent review. This review comes from Bailey Marianne, 30. And she said this is a great budgeting podcast. It's easy to listen to, full of helpful advice and down to earth. So, bailey Marianne, thank you for taking the time to rate and review the inspired budget podcast. I'll be back next week with another brand new episode. I'll see you then.
