10 Money Revelations in My 30s

by Ben Carlson, A Wealth of Common Sense

A few things Iā€™ve come to realize about money as I recently hit the mid-point of my 30s...

1. A successful financial life comes from increasing your career prospects and saving the difference, but that doesnā€™t happen with lifestyle creep.Ā Most personal finance experts talk about how much you can save from cutting back, but very few talk about the benefits of finding ways to earn more money. A combination of the two helps with financial security, but the biggest thing most people have a hard time with is keeping their standard of living relatively constant when they do finally start making more money. The secret sauce comes from making more money whileĀ not wanting more stuff.

2. House payments act asĀ a formĀ of a fixed income investment. One of the best things about a fixed rate mortgage is the fact that you know exactly what your payments will be every single month of every single year you remain in that house. This is a great thing for financial planning purposes. And paying down your mortgage offers a guaranteed return based on the after-tax interest rate on your mortgage. Pay a little more each month and that return improves. Housing has not been a great investment historically. But being aĀ homeowner offers a simple way to slowly turn a liability into a valuable asset that can provide psychic income.

3. It makes sense to pay up a little for good beer.Ā This is something I did not value highly enough in my 20s as quantity won out over quality. Craft breweries might be getting a little out of control with some of their new flavors, but to me the number of new breweries popping up is one of the few bubbles where everyone wins.

4. It rarely makes sense to pay up for good wine.Ā Expensive wine, on the other hand, is overrated. You shouldnā€™t have to pay more than $20-50 for a really good bottle of wine. In a tasting most people canā€™t tell the difference anyways.

5. Spending money on time is always a good investment. This one became even more apparent to me when my daughter came along, but it certainly makes sense when you want to focus more time on your career, as well. In the past there were a number of tasks that I would do myself out of principle alone. Why pay someone else for something Iā€™m able to do myself? Iā€™ve now realized that outsourcing makes sense when it gives youĀ more time to do things that are really important to you.

6.Ā How much money you make has diminishing returns over time. After a few years in the workforce many people will start to figure out their number.Ā If I could only make $X a year I would be set.Ā The problem is that once you reach that level there will always be another one and then another after that youā€™ll be striving for. Itā€™s obviously not a bad thing to make more money, but making more money alone isnā€™t going to make you happy.

7. Experiences resonate more than material possessions. Whenever I get together with friends or family weā€™re always sharing stories about fun, funny or random things that happened in the past when we all got together. No one ever gets together to share stories about how fun it was to go on a shopping spree or buy a bunch of clothes or household items. SpendingĀ money on vacations or dinner with friends or time with family will almost always pay off. You canā€™t say the same about material possessionsĀ that tend to lose theirĀ luster in short order.

8. Buying a book is one of the best deals on the planet.Ā Iā€™m sure Iā€™ve said this before, but itā€™s a pretty amazing deal when youā€™re able to spend $10-$20 to read a couple hundred pages of someoneā€™s thoughts, stories or ideas that have been developed over a number of years along withĀ months or even years of research to back it all up. Not all books are worth your time, but reading a good book is one of the more underrated investments there is.

9. Negotiating is an underrated money skill.Ā Iā€™m by no means an expert negotiator, but simply asking people and businesses for a break on price can go a long way. You donā€™t have to wait until youā€™re haggling for a car to negotiate either. There are plenty of different businesses thatĀ are willing to haggle on price ā€” credit card companies, insurance providers, cable companies, banks, retailers, etc. The worst that can happen when you ask for a break on prices or fees is that someone will say no.

10. Saving money is a huge stress reducer.Ā The best thing a savings or investment account can provide is peace of mind. Itā€™s never fun to shell out money for house or car repairs or healthcare expenses, but it can take the stress level down a few notches when you realize that you have some savings in the bank that can act as a backstop when things invariably go wrong.

Further Reading:
Personal Finance is Personal

 

 

Copyright Ā© A Wealth of Common Sense

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