33 Money Lessons I Learned Before 33: Part 2 of 3

And we are back for Part 2 of my birthday edition of 33 Money Lessons learned! If you missed Part 1 from last week, you can click here for Part one. I must have been feeling especially frugal this week since several of the lessons in this post pertain to saving money and frugality.

Money Lessons 12 through 22:

12. Dream bigger. My life’s goal was to “Not be poor”.  When we finished paying off all our debt, it hit me that I had achieved that goal. Now that I’ve explored what we might do next, like saving to become millionaires, Financially Independent and possibly retire early, I realize how small my thinking was when I set the “out of poverty goal”.  However, at the time when I set it, it seemed like a HUGE goal, I didn’t know if I would ever achieve it.  I would have been satisfied if it took 50 years instead of 9 years to become middle class. 

Now I am pushing myself to dream bigger since it still isn’t coming naturally. Keep asking yourself, “What would be a bigger version of this goal?”. Ask other people who have achieved what you want to achieve what their goals are. Push yourself to dream bigger because you are capable of more than you realize.

13. Investing is for me and it is for you. When I was getting my degree in Accounting, they explained compound interest and the importance of starting to invest early, yet I was intimidated by investing. I didn’t believe that investing was for people like me; people who don’t come from wealthy families that invest money. I missed several years of 4% employer matches by not starting to contribute to my company’s 401K when I became eligible. That means I missed out on FREE MONEY. Thank goodness for my co-worker Karen who lectured me one day when I told her I wasn’t investing. Hearing someone tell me that it is for me helped me overcome the intimidation factor.

Also, start learning about investing before you are ready to invest since it takes a while to understand how it works. It helped me to start investing a small percentage until I became more comfortable with the process.  If you don’t have access to a 401K, you could start with a small amount going to an IRA or start with $50 in a Robinhood account.

14. Budgeting isn’t punishment, budgeting gives us freedom. When it comes down to it, budgeting is like discipline for our money. We get to decide how we will allocate our resources. It is an opportunity to choose the things we really want most in life and eliminate the rest.

The more disciplined we are, the more freedom we have to choose what we want. Most of us want freedom from stress, freedom to chose work that matters and work that we enjoy, freedom to choose how we use our time. Setting and following a budget can guide us to the place where we have a high percentage of our income completely free to do whatever we want with it…spend, give, save, or invest it away. It is empowering to decide what to do with monthly income and then see that plan through execution.

15. Fostering a sense of contentment is key. Being happy, satisfied and grateful with what you have now makes saving money so much easier. Contentment helps us choose less. We could have used our $210,000 of farm profit as a down payment on a million-dollar home. Instead we chose a 210,000 house and no mortgage. Having no rent and no mortgage allows us to now save more than 60% of our income every month and invest thousands of dollars every month, setting us up to hit our retirement savings number by age 39.

Buy less car than you COULD, buy less house than you COULD. Some people just buy the most that they qualify for. It is possible to be HAPPIER with LESS.

16. Frugality isn’t enough, you actually have to make money too. I swore up and down and side to side, and promised myself that I would never be broke when I became an adult.  However, I had anxiety about applying for jobs and lacked the courage to try, so I found myself lying on a mattress on the ground of my shared studio apartment, unemployed with $200 in my bank account.  I realized that being frugal is good, but I will be broke if I don’t get a job. 

Seems obvious, but it didn’t truly sink in until that day. The next day I filled out an application for Quiznos subs, memorized their entire menu before my interview and was hired that week.

17. Be a gracious receiver. I love treating family and friends with gifts and food and all the things. It feels good to give. I felt so proud and happy the first time I was able to pick up the bill at a family dinner at a strange and dark little Mexican restaurant in Butte Montana. Don’t rob your loved ones of the opportunity to feel the same way.  Give them the opportunity to feel the same and then be honestly grateful.

It is tempting to always pay these days, and honestly, I feel that there’s a slight obligation/expectation to pay, but I have to find ways to rotate the giving and receiving so that I’m not hogging the joy.

18. The only thing worse than no money is negative money. I used to put a pillow over the vent in my bedroom floor when I was tired of hearing my parents fight downstairs in the kitchen about not having enough money to pay the second mortgage. I decided that being broke and having $0 in the bank is one thing, and it is entirely a different, and worse, thing to have $0 in the bank and owe someone large sums of money.

While I did go on to leverage debt to pay for college and my car, the plan was always to pay the debt off as quickly and aggressively as possible. I sacrificed a lot to pay off my student loans in 4 years instead of 10 and I’m still so grateful and relieved that I am free of that burden.

19. Establish and enforce your boundaries. Personal boundaries are guidelines, rules or limits that a person creates to identify reasonable, safe and permissible ways for other people to behave towards them and how they will respond when someone passes those limits. These might be simple, like not sharing your passwords with your friends or they might be complicated like establishing the parameters in which you are comfortable giving money to people. Boundaries are important for healthy relationships and healthy finances.  

20. Creativity isn’t only for arts and crafts. Creativity and finance can go hand and hand which is part of the reason that I’ve come to love personal finance.  You can use resourcefulness and creativity to find ways to save money that are painless, and possibly even fun. I’ve done this in a literal sense, by making my own wall art for my house as well as making my own wedding cakes which saved us tons of money. Having limited resources can inspire creativity.  For example, did you know that a yogurt lid makes an excellent tub stopper?

Important note: Your brain cannot be creative at the same time as experiencing shame/guilt/fear. It takes a bit of a mindset shift but if you can let those go you can find new ways to increase your income and decrease your expenses.

21. Your brain isn’t built to remember thousands of bank transactions. I believe that tracking your spending is the most important thing you can do for your finances. Knowledge is power and it enables us to see insights into our habits that aren’t obvious.  Even if our brains could remember hundreds of transactions every month, why waste mental energy on trying to remember them? (I know David Allen would agree with me on this.) Instead, build a system to track and review spending by category by month. You should be able to easily answer questions like: How much did I spend at Restaurants in November, December, January and this month.

Spending Category	November	December	January	Month to date February
Groceries
Restaurants
Total Spending

22. Frugality is a journey not a destination. Every January for the last 3 years I have asked myself: “How can I save more money this year?”. And every year my gut reaction says “I’m already so frugal, I can’t save anymore money without decreasing happiness.” That, my friends, is a self-limiting belief. The lesson that I have learned is that I can push myself passed that reaction, then I can brainstorm/research and come up with a handful of new experiments to try. Every year we have found new ways to cut, minimize or swap to something less expensive for equal or greater happiness.

Just last year we discovered that we can be equally happy without streaming services in the summer. We do like streaming in the cold boring winter months but we just don’t have time in the summer to justify the cost.  So we were able to cancel Netflix to save money during those off months and now we can explore new streaming services. There are new products and services all the time that we may not know about that we could switch to for less money and more enjoyment.  We can always become more efficient with our money.

For Discussion:

What lesson here do you most agree with/resonate with?

Any that you disagree with?