More Personal Finance Things I Wish I Knew Sooner

Disclaimer: I am very aware that everyone has their own experience and is subjected to their own opinion about this subject. Please do not take this as financial advice as I am not a financial expert. All my blogs are based on personal experience.

A big part of maturing is surviving and learning from your financial growing pains. Whether it’s getting hit by unexpected bills or suddenly losing your livelihood, these are painful experiences we generally try to avoid at all costs. But some occurrences are out of our control, and the only thing we can do is plan for how we’re going to make it out of this.

Over the past six years, there have been 3 financial milestones I’ve reached:

1. Getting rid of all forms of debt.
2. Moving out.
3. Being able to afford more “luxury” items.

In the works…

4. Working on becoming 100% financially decoupled from my parents.

To be completely honest with you, I thought by 25 I would hit bigger numbers. But knowing what I know now, I’m grateful for my own journey and the rich experiences (+growing pains) it’s given me; an inside glimpse into the “real world.”

The real world is tough. The job market can be very tough – as you can read more about in My Thoughts on Entry Level Jobs. And managing your personal finances is tough. But the earlier you take on the challenges life throws at you, the better you can adapt and grow.

Sure, I’m not making six figures – but I think I speak for most when I say that it feels darn good to be debt-free and to have the certainty to afford a nicer article of clothing or an excellent piece of technology that can improve your work.

As I mentioned before, there have been recent times in my life when I struggled to buy a cup of coffee, or mascara from the drugstore. Last week, I placed an order for a new phone that cost $1700, and shortly after I purchased a gorgeous sleek pair of headphones that cost upward of $800. In the summer, I decided I was sick of sunglasses that broke every season and invested in an Italian pair that cost more than what I used to make in 2 weeks.

I’m not saying this to brag because I am by no means rich, and I will never claim to be.  In fact, to give you an example, I had to fly back to Asia for a family emergency this week and it was a mental battle just to get the round-trip ticket, which cost a lot (travel inflation is REAL).

This was a painful experience, as every major purchase I make these days is very intentionally calculated. But when things don’t go according to plan, these unaccounted costs become very mentally stressful. I have to constantly remind and reassure myself that I’m not going to go broke, despite a month of higher expenses. Plus, I didn’t need to dig into my emergency savings. My last post, “ Personal Finances: What They Didn’t Tell You in School” was pretty well received—I’m guessing because some of you out there can relate. That’s why I decided to extend the list, as transparency and awareness around money is an ongoing and lifelong pursuit. The more empowered women are about their finances, the more they’re able to achieve the life they dream about. So without further ado, here they are:

1/ Random financial hurdles are inevitable; the faster you learn how to handle them, the further along you’ll be.

Unless you belong in the 1%, chances are at some point in your life, you will face financial challenges. Maybe you’ve done well for yourself, and you have a stable, moderately high-paying job/career. You’re cruising by for the first ten- maybe 20 years of your life. And bam, suddenly, something happens— you get fired, laid off, traded out for younger talent, have a personal epiphany, your long-term partner leaves you, the market hits a downturn..etc. There are so many factors we don’t prepare for when we’re doing well. I mean who wants to think about the possibility of not making the mortgage, when we’re sipping our champagne on a seaside resort on our third vacation of the year?

Most people work hard their whole lives to avoid financial burdens but are ill-prepared when they occur. As much as we try and hope to be, no one is perfect. We’re going to splurge from time to time on things we don’t need. We’re going to lose money through bad investments. We might get hit by medical bills, or have to take care of an ailing parent. I used to victimize myself all the time – from as young as I can remember.

“Why didn’t my parents make more money?” I would think to myself. I watched my friends go through high school and university without ever having to do a clock-in. Meanwhile, I worked around the clock and struggled to keep my eyes open in class.  I wished I could relate to whimsical family holidays in Hawaii or Japan, but the truth is that I’ve never taken a single vacation with my parents, besides trips back home to visit my grandparents. All the trips I’ve taken were 100% self-funded until recently.

I used to ask “Why me?” but recently I’ve been switching my mindset to how things have happened “for me” instead. This is a powerful shift, as it’s allowed me to shift the power from this imaginary force, back to myself. It no longer allows me to feel like I’ve been “robbed” of something. I acknowledge that if I ever do feel that way, it’s the fault of comparison. Do you think a kid in the rural part of Africa thinks about how they wish they had bottled water? Probably not, because they’re not looking at ads for it all day.

There have been many hidden blessings that have come out of periods of financial struggle. Personality traits like Fierceness, calculation, appreciation, and independence have been developed and sharpened like a fine pencil. I don’t think I would dream as big as I did and have been so hyper-focused on building my career if I didn’t ever have to worry about money. I wouldn’t have a long-term financial advisor or investment account if I didn’t know what it was like to have $0 savings. I don’t think I would have moved out if my parents were more financially supportive.

We can blame others or circumstances all we want,  but that will never change anything. Your life begins to change when you decide to change it yourself. Challenges and financial struggles can be the building blocks to success if you decide to build instead of lying idle.

2/ As your mindset around money evolves, it’ll be harder to relate to people you’re close with.

If you work hard and smart and surround yourself with strong minds, chances are people who don’t share the same mentality will find it more difficult to relate to you.  This is a sad thing because I’m sure most of us are accustomed to being surrounded by a similar group of people. It becomes incredibly devastating when people start to drift away – you start doubting and undermining yourself for not fitting in anymore. Or worse, that you were the problem. 

But here’s the thing. Drifting apart is a common challenge, regardless of what your mindset is. Sometimes, we need time and space to figure out our lives before we can focus on rekindling old relationships. If you’re constantly spending time with people with dissimilar lifestyles, habits, mindsets, and goals than you; it’s more likely you find yourself dismantling your own routine and values to fit theirs.

Although I love spending time with my family, their mindset around money has always been limited. I used to believe I was “bad” with money, but it’s because my parents saw my spending through their personal experiences. Now as I’m older and I make my own money, I spend it based on my own lifestyle needs and budget. I know it’s not out of reach to afford memorable vacations or items that will truly make “me” feel good, and not to appease my family.

Your environment is a huge determinant of how your life is going to like. Surround yourself with main characters, not background actors. Don’t be afraid of some friendly competition, it will only make you strive higher.

3/ There’s no one at fault for your financial mistakes except for you. The sooner you take ownership, the faster you can work your way out of any financial problem.

Let’s face it – being hit with financial setbacks just plain sucks. It’s easy to fall into an endless spiral of self-pity. I’ve only done that like 10000x times. Give yourself some space to be angry, sad, or experience whatever emotions come to the surface. But remember, emotions are temporary; they do not have to become your default solution to all of life’s crises.

Once you let it out, start thinking about ways you can dig your way out of the mess you’re in. You have to come to terms with the fact, that whatever has happened, you played somewhat of a role in. For example, let’s say you got scammed. It’s easy to wallow and point fingers at how horrible this scammer is. Although it’s indeed true people who rely on scamming to make a living are despicable, the real lesson here is how to be more careful online and how to watch out for potential scams.

It’s easy to blame the banks, the economic conditions, politicians, bosses, or scammers for your financial woes; but blame doesn’t fix.

The more time you spend despising others for your downfall, the less ability you have to move forward from these mistakes. So, get to work. Build a plan and put all your focus into fixing this problem, instead of dwelling on the fact that it’s happened.

Every financial mistake I’ve made, I’ve made it out alive and some. Call it karma or experience, but I’ve chosen to let my mistakes elevate me as human, rather than bring me down. I’m always grateful for making my money mistakes early on in life because it saves me from making them in the future when the stakes are much higher. 

I’ve always been self-conscious of my inclination to trust and naivety. So instead of denying my natural tendencies and always putting the blame on “the bad agent”; I’m just more cognizant of what to watch out for so I can avoid making the same mistakes.

If only I could show the girl back then what I know now….

---

Read here: The Best Money Mistakes I Made Growing Up

4/ Don’t try to “build credit” until you know how to budget.

We’re sold this American Dream by the banks that our adult life should revolve around “building credit.” Think about the signup bonuses and the perks and loyalty programs that are built off credit cards. Having a good credit score is indeed important if you want to buy a car, home, or (surprise) take out a larger loan. We’re forced to play into this system if we want to “level” up our lives. However, I argue that not everyone is equipped to have a credit card. Read that again.

I certainly wasn’t for a long time because I was always spending more than I should and could afford. It’s so easy to rack up personal debt. A weird thing happens when you have a credit card – you spend with less thought because it’s not like money is being taken away from your bank account that second. You have time- leeway, to pay it off at a ‘later’ time.

I am actually a huge fan of debit cards- and I view them as good training wheels for people before they start using credit to buy personal items. Every time you use a debit card, money is taken out of your account in real time. Whatever you have in there, is what you are allowed to spend. The fine that comes with going below your threshold amount (usually $100) acts as a buffer from you going over your limits. Debit cards are a fantastic way to practice financial discipline before you’re ready for your credit card.

I’m not ashamed to say that I’ve been on training wheels for a loong time. I also kept my credit card limit low, so I know I can’t go above the number. Over time, you build up a habit and you know roughly the amount of money you’re going to spend every month. Once you have a consistent budget and spending schedule, then think about signing up for a credit card that rewards you with points or cashback. I personally love the Aeroplan option (if you’re Canadian), because it gets you special perks at the airport (i.e. free checked bags, travel insurance) and you can redeem points for free flights in the future, and earn member status with your airline.

5/ When there’s money to be earned, people (can) lie.

Money powers the world. Let’s face it, it’s warped into every decision, whether it’s at the grocery store or in the boardroom. If you’ve lived a relatively sheltered life, it can be easy to assume that all people are good and honest. I thought this way all throughout my life until I got into my twenties. That’s when I witnessed that people will lie, scheme, and sometimes go to extreme lengths to get the paper. At the time, I did not understand why people would choose to hurt others financially. But as I experienced my own financial struggles, I began to understand the deep-seated desperation. Like many other women in their early twenties, there were times when I considered doing things I was not proud of. Thankfully, I never had to resort to it. In business, they say it’s a “win-win”. The reality is that the person trying to sell you on their business is hoping for a giant markup – that’s where they make the profit.

It’s simple math, but as soon as you scale up, being successful is no longer about making a slim profit margin after expenses. People start thinking about ways to further cut costs (undermining staff, exporting their labor, under-the-table tactics, lying to their clients about how much things actually cost..etc.) Drive can be easily conflated with greed. We’re conditioned in society to amass wealth, so greed is often masked with the word “ambition” or “drive.”

The definition of greed is simply, getting more than you need.

• That means increasing your margins, despite of it crossing ethical boundaries.
• That means fixating on making more money at the sacrifice of your family, even when you already live comfortably.
• Spending the better half of your money on drugs, booze, clothing, whatever you fix is.
• Lying to the end user your product or service can provide more than it can.

Next time you’re in a situation where money is at stake, you need to carefully and objectively consider the situation. People who are out to make a buck, are just like you and me, except sometimes their livelihood depends on whether you say yes or not. Sounds extreme, but this is most cases whether you’re an early-stage entrepreneur, a plumber, or a professional scammer.

Do your research and due diligence before you agree to anything based on “how you feel about the person.” Because trust me, the person will treat you like a queen/king if it means you’re pulling out your wallet in the near future. Do not make judgment calls about money based on emotion, even if it’s with your friends, and sometimes your family.

Conclusion

At the end of writing this, all I can think about is that there’s still so much to learn. These lists seem comprehensive, but it’s really just the tip of the iceberg. It takes a long time to break out of your archaic fixed mindset around money. Especially if you come from an indirect culture where money is rarely discussed; it adds a layer of complexity. Talk shit about social media all you want, but I’m so grateful that the content I get to see on a daily basis encourages women to achieve financial freedom and financial independence. There are so many inspirational creators and self-made bosses out there, that are creating momentum for the whole space. We love to see it!

If you didn’t grow up with a lot, it can be hard to picture yourself with a private jet. But here is what you can do:

• Create a vision board.
• Create short-term and long-term goals.
• Plan your weeks to hit short-term goals.
• Reflect constantly on how you’re doing.

I swear,  having just a few things in tact can change your life. You can notice differences in six months, eight months, a year. Three months is enough to upgrade your job. Six months is enough to save up for a dream vacation. Just a year is enough to double the amount in your savings account.

Build systems to reinforce your vision, think smart and long with your money, and surround yourself with people who share the same mindset. The world is your oyster when you become a master of your personal finances.

Rooting for your success,

---

You Might Also Like….

Personal Finances: What They Didn’t Tell You in School

The Best Money Mistakes I Made Growing Up

4 Ways to Manage Your Personal Finances

They Were Wrong: 3 False Money Beliefs

Follow me on Instagram