This week I turned 27 years old! All grown up and blogging just like an adult. As I have gracefully aged another year and gained more wisdom, I thought it was a good moment to reflect on the financial and life lessons learned in the past year.
Twenty six was a tough age for me. I’d been in Austin for two years and felt like I had nothing to show for it. I felt that way because that was the truth- I was underemployed, freaking out about life and broke as hell. I have come through that time to arrive at the glorious age of twenty seven a little bit older and a little bit wiser. As I sit and sip my ice coffee this morning, here’s what I have to offer you dear readers.
1) Knowing Your Finances is Knowing Yourself
Sit down and get to know your financial self
If you know what you want to do, are doing or want to try to do with your money, you know who you are. If you choose to spend your money on lunch out three times a week, you know that you value convenience and probably hate to cook. If you save up for big trips or purchases like a car, you know you value saving for major expenses and can deal with delayed gratification. Taking a look at how I spend my money has been one of the most eye opening learning experiences I have ever had.
Mindless spending is a habit I had to work hard to break. Relying on a credit card is a habit I had to work to break. Re-evaluating my financial priorities and figuring out how to reach them was an incredible process I went through in the last year and it changed my world. My relationship to work and to money changed. My outlook on life changed. My plans for my future changed. Everything about my life changed when I sat down, asked myself what would make me happiest and figured out how to start getting there.
Once I acknowledged the stress and anxiety that my loans produced, I took action to change that situation. I had my ‘gazelle-intensity’ moment in September 2014 and paid off my first loan completely the next month. I changed everything about my life to revolved around debt payments and that in turn made me a harder worker, more organized and motivated and a happier person overall. I feel overjoyed at my new debt numbers and know that I am in the home stretch. Knowing my finances helped me find myself.
2) Saving is Hard
Saving money is the holy grail of our personal finance world. It’s the number one thing you need to do. Period. End of sentence. Applies to everyone. It’s also astonishingly difficult to do. Life happens to us all and it can cost money. Whether it’s an emergency that comes out of nowhere or an ongoing situation, life can get in the way of saving your money.
Saving is so important though. Savings provide a sense of security and open the road to financial freedom. Once you have any amount of savings socked away you have given yourself a safety net. Should some sort of unforeseen event come into your life you’ll be prepared.
It can be particularly tough to save when you have any debt. It seems like you should throw all your money towards ridding yourself of your debt. If you have some sort of debt it’s even more important to have a cushion of savings though. If you throw all your earnings towards debt and don’t build any sort of emergency fund, you run the risk of actually digging yourself into a deeper debt hole. You could wind up using credit cards to pay for any emergency that comes up or you could overdraft an account in your rush to pay off a debt.
3) Support Systems are Critical
I have some amazing friends. Some of my friends are strewn across the country, from Portland to NYC. Some of my friends are here in my house, people I get to see every day. I have a wonderful support system in my life that have helped me in my road to debt freedom. Their support and understanding, especially from my housemates, has really helped me achieve debt payoff success!
More than that though, my friends help me realize things about myself, help me celebrate my highs (like birthday’s!) and help carry me through my lows. I rely on my friends for all sorts of things. When I announced that I was doing a no-spend February, they were on board. When I said I wasn’t going to do Christmas presents for them this year, in the name of debt payoff, they were cool with it. My friends are amazing and without them my whole life and my debt payoff journey would be completely different. And probably less awesome.