Graduation season is drawing to a close and it’s probably safe to assume that yet another crop of newly minted grads were forced to listen to commencement speakers offering a panoply of rearview mirror lessons of life and career. I was not among the luminaries who addressed these cap and gown-clad millennials with pearls of wisdom about things they wished they had learned in their 20s. But I do have a list of some things you should already be on top of by time you turn 30. Make it a summer project to get a jump on these now.
1. It’s not enough to live within your means
I know it may sound aspirational to those who of you who are knee-deep in debt but spending what you earn is not going to serve you well in the long run. Ultimately you will have pricey goals to fund, like a car, a condo or retirement and you must find a way right now to put some money aside to grow over time even if you are sleeping on your buddy’s sofa and living on Domino’s pizza.
2. Start your savings habit early
If you don’t start a savings habit early you’re unlikely to do it even when your paycheck is bigger a couple of years from now. Trust me, generations of workers before you expanded their lifestyle with every bump up in cash they received from their employer. Believe it or not, the six-figure set also complain bitterly that they can’t afford to save. (I know because some of them are my clients.) Spend less than you earn and bank a little each month so you’re not left struggling to pay catch up when you’re my age or older.
3. Don’t be tempted by the siren song of a sale
Finding a Macy’s coupon in am New York on your morning subway commute to the office doesn’t mean it’s time to shop. If you don’t need another pair of sunglasses for your upcoming weekend at the shore, you haven’t saved money. 50 percent off is still 50 percent spent. That last part is the real problem.
4. Use “credit card condoms”
Spending time thinking about what you really want (i.e. your personal goals) can save you big bucks over time that can be put to a better use. I wish my younger (and slimmer) self had grasped the concept of the opportunity cost. Buying the latest cropped J Brand pants or Beats by Dre headphones may seem like a no-brainer this summer, but if you spend a couple of hundred dollars on them what are you sacrificing down the line?
Money used today cannot be used (for something else) tomorrow! Handle with care. That’s the warning I put on the back of small envelopes I designed for overly active Visa, Amex and Mastercards (which I fondly refer to as a credit card condoms) and hand out in class at the Brooklyn Brainery in order to promote safe spending.
5. Your mom has bad investment advice
Turns out, well-intentioned folks like my mom and high school bestie don’t know which way the market is headed (no one actually does) or what hot new tech start-up will be the next GOOG. That was a lesson I learned the hard way in my 30s. But fortunately you don’t have to make the same mistakes with your money.
Join me on July 12 at Brooklyn Brainery for more things you should know about your money before you turn 30 (or frankly even if you have).