Financial Maturity, similar to all genre’s of maturity, can be difficult to gain and requires learning from mistakes we would rather forget. I distinctly remember times in my life when I made poor financial decisions (such as rushed purchases I later regretted or not postponing a luxury until I could really afford it) and later wished I hadn’t. While not a minimalist by any stretch, all around me are things that I wished I didn’t have or things I wished I had waited to purchase. And it’s not that they aren’t useful or cool, or that I wouldn’t purchase them someday. Rather, I am at a point where I would rather have my total investment balance in my Personal Capital app be $10,000 higher than have all these items. And, given the bull market we have seen since 2010, I could have easily doubled my money if I had just invested in a S&P 500 index fund!
This has made me incredibly passionate about delaying purchases. Once upon a time, eBay was difficult for me and I just had to stop visiting. It was easy to find “deals” that were a good value, but not something I truly needed. Amazon has been my most recent temptation since it is so easy to add anything you could ever want to your Cart, and then see it over and over again. You keep thinking about how nice it would be to have that one item, or maybe two of them. You reach the $50 Free Shipping minimum and BOOM! you get it. You receive the box in a week or less (I don’t have Prime, but my brother does, which is a whole other temptation!) and you have your shiny new items. The new stuff gets put into circulation, you use it every once in a while, but it just adds to everything else lying around in the home. And, the temptation for something new starts creeping again. It’s a vicious cycle that I am working on personally.
Lest you think this is only a post about buying things you don’t need…
Where I am most tough on myself and my past mistakes, though, is not saving as much as I should have. In your teens and early 20’s, a young adult is in an AWESOME position to save money since you have almost no expenses. You live with your parents or in a cheap apartment, you share meals, don’t have expensive tastes, etc. There is very little reason someone working full-time can’t have $10,000 or more saved in less than 5 years, even if they started at 16 years old. If you attend college, the money you make from internships and part-time gigs should be able to cover a large part of the cost, allowing you to supercharge your saving at your first post-graduation job. This is all predicated on the smart idea that you go to college for something that pays well. Which you did, right? Please tell me that at least you didn’t go to an expensive college for that low-paying career choice?!
As they say, “Hindsight is 20/20”. We can’t change what choices we made or actions we did. What we can do is accept personal responsibility, learn from past mistakes or poor choices, and make right decisions going forward. I challenge myself and you to limit spending to only that which is necessary to live life and truly enjoy your family, and save as much as possible for the rainy day and eventual portfolio that will give you freedom.