Once upon a time I considered writing a book to pass along the wisdom I’ve acquired in 66 years of living and more than 40 years of working for a living. I roughed out a draft, gave it a title, “Broad Perspectives” (nice play on words, don’t you think?) took some creative writing courses including a great week-long mentoring programme at Humber College last summer, and never really got the show on the road. Intimidated by the prospect of dozens of rejection letters in my future and no one actually listening to me, I decided to blog instead. And I love the medium. No editors. No censors. No critics I can’t handle. No R.O.I. to consider. Just me and whoever cares to tune in to BOOMERBROADcast.
So here’s the thing. If I had my life to do over, there are many things I would do differently, both in business and personally. Not a whole lot, as my mistakes and wrong turns are part of what makes me the fabulous person I am today. But with some tweaking, life could have been an easier, more satisfying journey. So, I’m now going to dish out some advice, primarily for young women who will be retired some day and will hopefully make better decisions than I did when I was young.
About 15 years ago, I read a book published in 1992 called “#Your Money or Your Life” by Joe Dominguez and Vicki Robin and that book changed my perspective on life. The book had been recommended in a sermon by a United Church minister who entered the ministry after a career in the business world. He had his MBA as well as other degrees and I figured he should know what he was talking about.
The strong message that came through in this book is the importance of financial independence. The book suggested that the sooner we are financially independent the sooner we can do what really satisfies us in life. This is not a selfish undertaking. It’s a simple survival skill. You cannot become a philanthropist, a full-time volunteer, an artist or whatever else you would rather be doing with your life until you have the resources behind you to support the lifestyle.
The phrase that most resonated with me was “sell yourself to the highest bidder in the short-term for long-term gain.” In a perfect world we would all have jobs or careers that we love so much it’s not work, but this is realistically not going to be the case for most of us.
At the time I read this book, during the recession of the 1990s, I was self-employed and a long way from financial independence. I was also in my 50s so time was running out. That’s when I made the decision to go back into the corporate world where I would have a regular paycheque and I could start putting my financial house in order. Which brings me to my first piece of advice:
Sock away as much money as possible from an early age. The reason for this is so that by the time you reach your 50s you will have options. When you reach your 50s, your view of life and your priorities may change. You may no longer have the energy or enthusiasm for your career/job that you once did and if you have a sizeable nest-egg you will be able to make lifestyle adjustments to accommodate new wants and needs. Without this financial independence you’re a slave to the master indefinitely. And you will not remember purchasing those designer shoes that seemed so important 20 years earlier and set you back a week’s pay.
I’m not about to tell you how to manage your money but be very wary of any kind of debt. This means not using credit unless absolutely necessary and only for large purchases such as a house or car. Many young people are so crippled by consumer debt arising from living beyond their means that they will never get their heads above water. Pay your credit card balances off every month and contribute to retirement savings plans and other safe investment vehicles every year without fail.
So, do whatever you can make the most money at and still be reasonably happy while you are young. Save as much as you can. The cumulative effects of saving even $10.00 per week add up with compound interest.
Do not risk ruining yourself financially for material goods. You can look good, feel good and be good without running up crippling consumer debt. If being a bridesmaid at a destination wedding is a financial hardship for you, decline the invitation. It’ll be the bride’s loss and your gain. If you can’t afford a new car, drive a reliable “previously owned” vehicle that meets your needs instead of your wants or take advantage of public transit.
I didn’t think about retirement saving until I was in my 40s. While it’s never too late, if I’d started in my 20s and accounting for compound interest, I could have accumulated a sizeable nest egg much earlier and not had to worry about money in mid-life. Unfortunately, when we’re in our 20s and even 30s, we seem to need a lot of money for education, houses, cars, kids, vacations and all the other demands of daily life.
It really is as simple as “pay yourself first”. Just as surely as your mortgage payment comes out of your bank account on a certain day each month, set up a plan to save the same way. There are hundreds of excellent books available to help you plan your spending and saving. Whether you use the jar system, payroll deductions or on-line tracking apps, plenty of help is at your fingertips. Banks will automatically transfer money from your account into savings and investments. As Nike so eloquently puts it, “Just do it”. You’ll never miss the money and I guarantee you’ll have a more satisfied middle and old age when you’re financially secure. And you’ll have a cushion in the case of an emergency such as losing your job while you are young.
Stay tuned for more valuable advice from the Boomer Broad.