I’ve reached one of those milestone birthdays where you stop and take stock of your life. I’ve been looking at where I’ve been and where I’m going professionally, personally, and financially. In looking at my finances, I’ve realized that there are eleven actions that have contributed directly to my success. These actions have all been things that were within my control. Certainly I’ve been fortunate or “lucky” in many ways, but by controlling these eleven things, I made the most of that good fortune and improved my circumstances over what they otherwise would have been. Here are the eleven actions that have benefited my finances the most.
Completed my education: I went to college and then graduate school. Granted, my major wasn’t anything earth shattering, but the education was valuable nonetheless. Beyond the books, my education taught me to manage time, to think for myself, to evaluate situations before leaping in, and to be a more informed person generally. It also instilled discipline and a work ethic (things I was seriously lacking in high school). Having those degrees has made me more marketable to employers and given me an edge when looking for work. I’m not saying that college and graduate school is the path for everyone, but there is no doubt that education is valuable to your finances.
Educated myself about money: Sadly, I didn’t learn much about money in school other than one horrible economics course. But since I’ve been on my own I’ve made it a point to educate myself about money. First I learned the basics of budgeting and then graduated to investing, insurance, and estate matters. Whenever a question about money pops up and I don’t know the answer, I go find the answer instead of just putting it aside. The more I know about money, the better prepared I am to make good decisions.
Kept up with job-specific education: My major in school wasn’t anything noteworthy or particularly useful in the real world. I made up for it, though, by learning a host of skills that are used in my chosen career. I’ve also made the effort to keep those skills up to date. Whether it was learning specific software, or the rules for writing different types of content, or a host of other things I use every day, I’ve mastered those skills. I still seek out classes and books that will increase my skills and I keep up with the marketplace to make sure I learn anything new that comes along. This makes me valuable to my employers and makes it easier for me to find new work when the need arises.
Avoided hasty decisions: There’s been little that I’ve bought or agreed to that was done in haste. Mostly that’s because I’m a big chicken and I fear the unknown. I like to go into things armed with research and information. This has kept me from buying too many things I shouldn’t, or getting into unwise financial arrangements. I take my time to make sure I get the best deal on the best product for me and I never do anything just because it’s supposedly a hot commodity or limited time offer.
Lived below my means: This is perhaps the most beneficial thing that I’ve done. I’ve never lived above what my income could comfortably cover. In the early days that meant living in a pretty crummy apartment and not having a whole lot of costly fun or vacations, but I did it and it kept me out of debt. Now I’m not stuck paying for a lot of things I did earlier in my life and I’m able to use my money more freely.
Frugal skills: I learned a lot of frugal skills. I learned them mostly out of necessity during the time that I didn’t have much money (see number 5), but even now I still do many of these things. I use coupons and will DIY any project that I can safely tackle on my own. I garden and sew and I repurpose and reuse as much as I can. I buy a lot at thrift stores and yard sales, finding some fun stuff and saving a ton of money in the process.
Stayed healthy: Granted, not all of this has been within my control. I’m fortunate to come from a family with pretty good genes. But what I can control, I have. I don’t smoke or drink to excess. I exercise and maintain a healthy weight. I get regular checkups and screenings to head off anything before it becomes a big deal. I take care of my teeth, too. Everything I can do to stay healthy for as long as possible saves me money, both in insurance premiums and out of pocket expenses. It also preserves my ability to work and earn.
Avoided unnecessary risks: Like I said above, I’m pretty much a big chicken. Because of this, I don’t take a lot of risks. I don’t invest in anything I don’t understand, no matter how many times people say it’s a “sure thing.” I don’t take big gambles with things like adjustable rate mortgages or home equity lines. I don’t take risks with my body, either. I don’t drive recklessly or engage in dangerous activities. I avoid as many risks as I can to keep both my wallet and my body in one piece.
Been uncool, old-fashioned and unfashionable: I am uncool and it doesn’t bother me. I don’t waste money chasing trends in clothes, homes, technology, interiors, or cars. I don’t keep up with the Joneses. I don’t upgrade things regularly just because there’s something newer out there. I buy things when I need them, with the odd exception of something that will really make a difference in my life in some way. It makes me an old fuddy-duddy, I guess, but I don’t need a lot of stuff and I prefer to keep things simple.
Been proactive instead of reactive: I like to plan ahead. If I can take care of something now rather than later, I’ll do it. This means that I’ve taken care of my estate planning at a relatively young age. I’m covered by all the necessary insurance just in case. I’ve saved for a rainy day. I’ve taken as many actions as I can to protect my future rather than waiting and reacting to crises as they come.
Started saving early: Second to living below my means, this action has helped me the most. I started saving when I got my first job out of school. (I’d saved some even during school, but most of it went to pay for school expenses rather than long term goals.) I saved both for retirement and for emergencies. Even if it was only $20 a week, I put money away. Over the years that little bit of money has grown into something bigger. Had I waited to start until I was making “good money” I wouldn’t have as much today.
These eleven actions and attitudes have made all the difference in my financial life. Sure, there have been other important decisions such as which jobs to take and when to go out on my own, but the eleven things above set the foundation that made those other decisions possible. I didn’t always take these actions with the specific goal of “improving my finances,” but looking back I see that’s exactly what happened. (Sometimes you do things without really knowing why and it turns out that it was the right thing to do.) Given the fullness of time I can see now that all of these things made it possible for me to be where I am now.