💸Do this one thing the Minute You Start Earning to for a Lifetime of Financial Freedom

They say that if you’re able to manage a small amount of money then you’ll be able to manage more money and yet more money. Since money management lies not in how much money you have but in how you look after that money. If you can’t manage one hundred bucks managing a million bucks is gonna be a tricky task. You gotta focus on the how not the how much. 

The thing is we aren’t exactly taught personal finance in school. Or anything money-related to be honest. Apart from when it crops up in our math textbooks asking us to solve a compounding interest question of some sort. We’re so busy being taught about pythagoras and photosynthesis that we don’t even get the chance to learn how stock markets work.

But kids are like sponges. They’ll absorb almost absolutely anything. And what better age to teach them something as crucial as personal finance than when they’re young?! Though some will argue that talking about finance would stifle kids’ creativity an all that. But I think creativity isn’t solely limited to the arts. It lies everywhere.

Creativity is simply a new relationship between two points. I’s just like any other muscle. You must work at it and eventually will work for you. I believe that creativity can most definitely be found in finance. Perhaps I’m just biased! Or maybe that’s because it’s true! But I reckon that our beloved curriculum could squeeze in a little personal finance chat in between reflective thinking and PE!

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But if we weren’t taught these things at school, then at least our parents should teach us this stuff, right? But if our parents weren’t taught it themselves, then how can we expect them to teach us? We then become the ones who end up lacking in knowledge because our parents weren’t given it either. And the cycle goes on. And on.

And somehow, we’re expected to magically know how to manage our money. Just like that. With little to no understanding or basic knowledge. To know how to invest, how to budget and how to be financially savvy. It just happens on its own, right?

But we can’t nor shouldn’t live our lives wishing someone somewhere had taught us something. As much as we’re totally validated. But good thing for you is that you’ve found just the place ‘cause I’ve got your back!

Workin’ on it 

Working life is a funny thing. Working is that taste of freedom. (Paradoxical, I know). You finally earn your own dosh and you feel kinda grown-up. Though many grown-ups wish they could just turn back the clock. But anyway, everyone’s forever going out for drinks (10X more pre-covid I bet), going to parties, gathering, get-togethers and just being a real social butterfly. But didn’t anyone ever tell you? Money doesn’t grow on trees! 

The earlier you start managing your finances, the better off you’ll be. (Read here how to upgrade your finances in less than 1 year). And unless you seriously decide how much you’re gonna spend each week/month, then the very same money that you’ve worked so hard to make could literally end up going down the drain. And pretty soon.

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Start now to set yourself up for freedom

If you don’t make a conscious effort to put yourself first by budgeting, saving and investing, it’ll be so much harder for you to build the future you want. When it comes to investing, time is your greatest asset and the younger you are, the more of it you’ve got. Which means more time for your money to compound. And it all starts with learning how to live below your means. Read here why more than one-third of Americans earning >$250K live paycheck to paycheck. Shocking, I know! Make sure you’re not one of those. Earning big, yup but not spending big.

This isn’t glamorous. And no one said it was gonna be easy. It isn’t meant to be. The easy roads lead to harder lives down the line. Instead, won’t you rather be a bit frugal now and get to enjoy a house with a way smaller mortgage and an infinitely calmer mind? Or you could keep on spending willy-nilly as you watch your deposit and your future vanish from your eyes.

It’s so much easier to scrimp and scrape when you’re young than when you’re old. Imagine this: you’re 70 years old and you wanna treat your granddaughter to something special. But you don’t have much disposable income. And the little you do have goes to bills and maybe even paying off your mortgage. I know that sounds miserable but if we don’t plan – and more importantly act – we could very well end up like that. Time creeps up on us and, before you know it, we’ll be leaving the workforce! To retire. 

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This can all be avoided by making sensible choices. And the recipe involves not following the crowd. Not buying stuff to impress others. And not falling into the trap of lifestyle inflation. We know inflation’s a real bummer. It means our money buys less and less and it also means we’ve gotta work harder to retain our purchasing power. But lifestyle inflation’s even worse. It’s a tax you bring on yourself that creeps up on you before you even notice what’s happening.

Lifestyle inflation 

It all starts with you earning more. You either get a salary rise or a bonus or both (double-yay). So what do you do? You end up buying a bigger house with a bigger mortgage and you splash out on a fancy car (hello, 9% interest.). Oh, and you’re forever holidaying. This is your new lifestyle.

What used to be pure luxury and excessiveness has slowly but surely turned into a necessity of sorts. And before you know it your standard of living has been bumped up. By several notches. You no longer have small bills to pay. What you owe now are mammoth bills. Everything’s become more expensive. And you’ll be the one paying for it. (Read here how to control your credit card rather letting your credit card control you!)

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So now you’ve gotta work harder to fund this new, more expensive lifestyle. You’re working your butt off just to pay off a bigger mortgage and a heftier car loan.

That is the opposite of freedom. A higher pay-check should mean you’re investing more; not spending more! ‘Cause if you spend more, you’ll have nothing or almost nothing left. Treat higher salaries, bonuses, ect as magic investments. The kind that go straight to your accounts as though you had never received them in the first place!

Because later on it’ll give you that pay rise you need. The right kind. Brought about by your investments and your sacrifices. That will taste sweet. Far sweeter than giving in to temptation and the human need – and want – to fit in and to impress others. Ditch that. Everyone’s way too busy living their lives to worry about what you are (or aren’t) up to. That should be a liberating thought btw!

So go out there and do your thing. Live your life and do what works best for you. And what will give you the best chance at success. Impress yourself and not others. You’ll be far happier – and richer for it.

When you do start earning (if you aren’t already!), the key is to live below your means. To not splash out on things simply because those around you are. It’s so much easier to save now than later down the line. And no one wants to be tied to the workforce forever.

Do all that you can to set yourselves up for financial freedom. If that means a smaller home, an older car and a few less holidays, then so be it. ‘Cause later down the line you can have it all paid for. By the choices you made today.  

Disclaimer: This blog is not investment or financial advice. It is my opinion only. This blog is not a personal recommendation to buy/sell any security, or to adopt any such investment strategy. Always do your own research before you commit to any investment.