Dear Younger Me,
Have you heard the song by MercyMe titled “Dear Younger Me”? It is an awesome song with a message that drives home how wonderful it would be if we could go back in time and sink wisdom into our lives based on what we know now. The tune relies on the adage “if only I knew then what I know now” brought out in a catchy, drum beating, easy listening way. This particular song focuses mostly on questions of faith, but the intent is highly applicable in other areas as well and is especially relevant when we look at our personal finances. What would you tell your younger self about money decisions you made in years past? I’m ready to get vulnerable here and share with you mine; yours may be very similar.
To begin with, I’d tell myself how dangerous installment credit cards are, especially those offered at the individual retail establishments, like oh say Ann Taylor, or Kohls, or Ulta. It SEEMED like a good decision when the salesperson said “You can save an extra 20% if you sign up for our credit card”. What? 20%! Well of course I’m going to save 20% on these things I really don’t need but really want. Why wouldn’t I? Then, I would tell myself the little lie about paying it off before any interest hit. Right. Of course that wasn’t going to happen but I sure felt confident it would. Oh, Dear Younger Me, if only you listened to the common sense you felt tugging at you each time you were tempted and guarded yourself against those decisions. Two years later I found myself being over whelmed with revolving store credit card piling up ridiculous balances with interest rates of 21% on average. I felt such defeat and anguish over the mess I had created for myself.
The next wisdom I would impart on myself would be – you don’t need that new car, the one you leased because it was the only way you could afford the sleek Honda with all the bells and whistles, especially that super cool sun roof. Dear Younger Me, if the only way for you to afford the car you want is to lease it, you should lower your standards. Leasing is the single most expensive way to buy a car. In fact, we shouldn’t even say it is a way to buy a car, because truly, it is a way for car dealerships to anchor a ball and chain to your leg. And then throw away the key. No one ever comes out on top of a leased automobile, well the dealer does and the finance company does, but no consumer benefits from a lease deal. The reason it sounds like such a good deal is because of what the leasing companies know, with great certainty will happen at the end of that lease. Most consumers will be forced to either buy that car that they are now upside down on value wise (did you know cars lose 15-20% of their value in the first year alone). Or, the car shopper will feel forced back into a lease for another a car and the cycle continues. (Que the mean evil villain laugh). Dear Younger Me, use cash to buy a car, even if it means it comes without the super cool sun roof. You’ll thank me later.
Finally, I’d tell myself how critically important it is to do a budget and do it well. At one point in my life some 20 years ago I had a 6 figure annual income for about 3 years running. True that I had just gone through a horrible divorce and had some financial baggage from that, but in reality I blew through a whole lot of cash with nothing to show for it. To this day I still cannot tell you what came out of that tremendous gift of income. As I inch closer and closer to retirement, I would tell my younger me, nope correct that…I would insist to my younger me to create and live on budget. I would even go so far as to insist that I find a good personal financial coach to help me create good financial habits and start building a future for myself. I was a pretty smart cookie when it came to corporate finance but I couldn’t budget for myself to save my soul. I had no idea how to do it correctly and so when I would try, I failed miserably and finally just quit altogether. A few long and miserable years later, I found resources and began learning how to take charge and how to tell my hard earned dollars what I wanted them to do FOR me, not BECAUSE of me. My income trailed off for several years but somehow, with the budgeting habits I began to learn and implement in my life, my financial situation improved with less money coming in. Strange, huh? My younger me was finally getting a grip on how to manage money wisely and when you begin doing that your focus shifts from “what am I making”, to “what I’m making is enough”.
Take a moment and write your younger self a letter. The start of the letter might feel heavy and ugly as mine did. And it may not yet be able to end on a good note. Yet, somewhere in that letter, I’m guessing you will see opportunity to shift and move and change the trajectory of your letter by the time you sign off. We have the wonderful opportunity to learn and grown from our past. Take advantage of that when it comes to your money decisions. You will be so glad you did. As the song says, “I wonder how much different things would be, Dear Younger Me”.
