Let your emotions guide your decisions
I know how hard this is, but you can do it. You’re a rational person, and when you come across anything bright and shiny, you think to yourself, “Now let’s think about this logically.” Yeah right. You’re like, “OMG I need that noooooooow!” A friend of mine dropped a few hundred dollars for a pet that he was super excited about. I tried to talk him out of it. The pet was rare, needed expensive food and who knows if he could find a veterinarian if something bad happens. He got it anyway and within a month, he was looking to get rid of it. And this doesn’t just go for impulse buys. In 2008, thousands of people lost a ton of money when the market crashed. So what did they do? They freaked out and took their investments out of the market. Had they left them in there, they’d have all their money back by now. Instead I’m sure a lot of people are still feeling the pain of the loss. Odds are that when there’s a recession, there’s going to be a recovery. Take a look at the history of the U.S. stock market. The cycles are pretty predictable.
Spend too much in college
One of the greatest things about being in college is that you have a lot of access to financial help in the form of grants, scholarships and loans. And you don’t have to pay any of it back! Well, at least you’d think that’s the mindset of some students at the rate they’re taking loans out. There aren’t many times in your life when you can get money like that at such a low rate, so a lot of students take that as permission to act irresponsibly. There are a ton of ways to avoid student loans, like going to a smaller college with lower tuition, studying hard (what? In college? I know, weird) and getting a scholarship, or getting a job. A lot of people seem to think they can’t have a job while going to college. I worked full-time while going to school full-time and I not only had a social life, I also avoided student loans until I got married and an unnamed female whom I love dearly told me I had to go part-time so she could see me more than half an hour a day 🙂
Don’t save. Ever.
#YOLO! Saving is for people who don’t know how to have fun. You can’t trust the economy, you can’t trust the system! I’m a big fan of living in the moment. I heard a story once of a man who had just lost his wife of 40 years just before he retired. They had foregone vacations every year to save up for when they could do it in retirement. He had about $200,000 for that purpose, and now she was gone and he had no idea what to do. That isn’t how I roll. I want you to have fun, but you do only live once, and your old age is part of that life. And your 65-year old self is going to be super pissed off at you if you don’t put anything aside for him or her.
Don’t live modestly
People always say that in order to be financially successful, you have to live within your means. But what does that even mean? If I make $750,000 a year, I can spend $749,999 and technically still be living within my means. So need I remind you of the ridiculously simple math of retiring early? The more you save, the sooner you can retire, if that’s what you want to do. If not, the more you save, the more vacations you can go on, or the sooner you can start the business you’re super excited about, or the sooner you can feel financially secure. I bet that’s an awesome feeling, and you can reach it sooner by living modestly rather than by trying to focus on just living within your means.
Don’t do the insurance thing
When I was an insurance agent, a lot of the people I came across defined life insurance (and any other insurance for that matter) as a “necessary evil”. But I wonder what words a widow and mother of 5 who just received a large life insurance check would use to describe it. It’s life-changing. The same goes for health insurance. I’m a big fan of health insurance. Yes, it’s expensive, and yes, there are a lot of slimeball insurance companies out there. But crap happens, and when it does, having insurance can be the difference between your family being secure and being completely devastated. I haven’t personally seen that devastation, but I have seen families where one of the parents doesn’t qualify for insurance, and the fear of something bad happening is tangible. So suck it up and protect your family. If you genuinely can’t afford it, do whatever you can in order to get at least some protection. Hopefully you’ll never need it, but if you do one day, you will be glad you had it.