My parents were not rich but we had everything we needed, although probably not everything I wanted. I had more toys that I could play with but wanted more, like every child, I suppose.
Growing up in the country side, I enjoyed a freedom that a lot of children don’t get to experience, especially nowadays. Walking our dog for hours was a perfect excuse to explore the woods, while dreaming of great adventures. Poor dog, he was exhausted!
I consider myself lucky. Life was somehow full of simple pleasures. Yet, one is never fully satisfied with what one has and I envied some of my friends who had bigger houses, who had better looking clothes, who were wearing make-up and nail polish, when I wasn’t allow to.
Fast forward a couple years, and after hitting the lows financially (very very low!), I started making significant amounts of money (significant for me at least). It took a couple years for me to reach the 6 figures threshold but not that many, after I got my sh&#@t together.
And there I was, a business woman, with expensive clothes and an expensive attitude. I had an ‘important’ job, I was ‘too busy’, exhausted, but I had made it!
My partner and I lived in Paris, we dined at fine restaurants and stayed at expensive hotels when taking vacations. We very often treated ourselves to exclusive get-away weekends, because that’s what you do when you live in a big city. You get away.
I also started buying a lot of clothes. I needed those to dress the part of the business woman I was. And expensive hand bags and shoes of course!
Despite all this, I never spent more than I earned. That’s not something that was engrained in my blood but… I could have saved so much more!
I made so many mistakes on this journey, I got blinded by shiny objects and it took me years to realize it.
So, here are the things I wish I knew back then. I could have called this piece ‘letter to my younger self’, but I know that my younger self would not have follow these recommendations, even if she believed they came from herself!
There is nothing extraordinary about these things. Just the same recommendations, everyone is telling you and you probably decide to ignore, just like I did!
I thought I should write them anyway. If for any reasons, just to remind myself!
Analyze your spending and draw a budget
Back when I earned a lot, I did not want to have a budget. Spending mindlessly (or almost) and still seeing a positive balance on my bank account was enough. It meant I didn’t need to worry. Life was good.
In reality, I knew where to draw the line. Plane tickets costing 10,000 EUR were out of the question. My handbags were around 500 EUR not 5000 EUR. (still ridiculous, I know)
Even if I didn’t have a budget, I had untold rules. Thank goodness for that!!
However, I still can’t believe how things changed when I started analyzing my spending with a magnifying glass! How my perception changed.
I was ashamed of myself for spending so much mindlessly. I didn’t even start this process during my worst years. By the time I started this process, things had already shifted in my life. It would be somehow interesting to go back to some of my worst years, but it would probably be way too embarrassing and aggravating!
Analyzing how I was spending my money over a couple months and then drawing a budget was really amazing and had a significant impact.
I wish I had known this sooner.
Apart from a few years where I had burned most of my savings (my very very low financial years), I always had a safety net in my bank account. I feel better this way. It has always been a goal and a reinsuring thing for me.
Yet, even when I could have been saving, I was merely saving leftovers. It wasn’t intentional.
Now, I know better. I know that saving should be a priority, not an incidental consequence of not having spent everything you earn.
And I saved 40% of my net income this year. Boy would I be rich if I did so every year!
So I wish I had saved money intentionally sooner. I wish it had been a priority.
Get financially educated
This is getting ridiculously hilarious. I can not believe how bad I have been at this. Especially considering my job… Not going into details but I’m still unable to optimize the most obvious and easiest tax deductible items for myself.
Understanding and optimizing tax deductible items is just an example. A basic of the financial education needed. Investment is the most important and yet I’m still working on that.
I’ve already travelled a long road, but the road ahead is just as long. I’m happy I’ve taken the first steps even if I’ve done so way too late.
Indeed I wish I had started sooner.
Set financial goals
My financial goals a couple years back? Get a bonus and go spend it on vacations!
Hope for a raise. Get upset and change job if you don’t get one (never had to).
That was about it.
Now? Well I do have a budget and congratulate myself for respecting it. I revise it often actually, not to fit some unforeseen spending, but to lower it!
I prioritize saving and work toward increasing my income, steadily years after years.
As hinted before, I’m also looking for a way to diversify such income.
I’m also working on doing better with tax deductibility! Finally!
Investment wise, I’m barely there yet. I’ve always been scared and this has not changed. I’m kind of glad my partner and I bought an apartment because for now, this is my focus.
Well, I consider having made great progress but again, the road ahead is long!
Talking finance with your partner
This is kind of a bonus point! But this actually had many impacts for me.
For a few years, my partner earned more than me but I wanted to ‘keep up’ and wanted for our spending to be equally shared. This lead me to a wall and I had to accept to lower my participation. It remained painful for me.
Then came a time where I earned more than him. It was fine by me! It wasn’t about earning more than him, it’s just that I had reached an income level where I felt safe. He wasn’t that comfortable with the situation, unconsciously I must add.
And things kept fluctuating like this. Thankfully, we are both more relaxed about it now.
The point is that talking about finance with your partner is super important. We never even had a joint account (until we bought the apartment but it’s an account just for that) but I always wanted for things to be shared fairly, if not equally. He never cared much. We were not on the same page on various level and money was therefore always a touchy subject.
Being able to talk about your personal finance and your goals with your partner makes things much easier. And even easier when you have the same goals! Which we don’t, to this day!
No, you don’t need another handbag
No, no, no, I didn’t need another 500 euros handbag to look professional, or to do my job! (I didn’t need all these shoes either!)
Most importantly, some of the best memories I have are from road trips we took where we went camping, not from the most expensive hotels we stayed in. Little did I know back then, it would be the case. And the same goes for the best diner parties, the most memorable experiences, the best times… Spending a lot does not always provide the best return on investment.
Oh well, what is spent is spent…
Now, if you’ve read up to here, you probably realize that the relation I have with money is very emotional. I think it is probably the case for most of us. We are taught, mostly unconsciously, about money from our parents. Sometimes we follow in their path, sometimes we rebel or learn a different path. Sometimes life throws things at us which become highly influential. My “very very low financial years” certainly did!
There is a good reason why there are a lot of books and articles out there, about the ‘money mindset’. It is a real thing! Well, at least, I came to realize, it is certainly real for me. I came to realize my money mindset was screwed and I’m actively working toward changing that. It takes time – If you are on this journey too, don’t give up! It really does take time – but I think it’s working!!