Throughout my adult life, friends and family have given me multitudes of advice that were as applicable to my finances as they were to my life in general. While you couldn't say "money well spent" and my name in the same sentence in my early adult years, I've learned many valuable lessons on my journey to financial maturity.
Don't look a gift horse in the mouth
Many years ago, I proved that my academic scholarship didn’t mean I always made smart decisions. I left college—and my full-ride scholarship—after one semester. Immediately, my dad told me, "You will learn from your mistakes."
To drive home his point, my dad told me I would pay my own rent until I returned to school, while my mom added that I would also pay the full cost of tuition when I went back. I did, and I did. I looked a gift horse in the mouth (whatever that means), and it laughed at me.
While I paid for the cost of my decision-making in this case, it cost me a fraction of what the same mistake would cost a college student today. Don't let loved ones make the same consequential financial mistake I made, especially considering the soaring cost of college and the increasingly competitive nature of scholarships.
Throwing my money away
I wasn't done learning after this mistake. Around the same time I threw my scholarship away, I bought a used 1966 Mustang that looked infinitely better than it ran. I borrowed money to buy the car, and then I borrowed more in a desperate attempt to coax it back to life. In other words, I threw good money away after bad—another axiom I heard when I was young but didn't fully absorb until I was much older.
After watching that Mustang disappear with the truck towing it to the junkyard, I never bought a car again without asking for the advice of people who knew more about cars than I did and researching my choices thoroughly. This lesson applies today, whether you shop for a home, a college, or a vacation. Do your homework and rely on the people in-the-know to guide your purchasing decisions.
Seizing control of my career
Life lessons are nothing if not persistent, so I continued to learn the hard way. I learned that I was my own best career prospect after one company I worked for folded and another downsized. That's when I became a freelance financial writer some 25 years ago, long before the gig economy became a thing. It took my mom five years before she stopped asking me, "When are you going to get a full-time job?"
In this case, given how the workplace was transforming, my inclination to become a freelancer resulted in a better outcome for me than following my mom's advice likely would have. When the economy hits a rough patch and unemployment rates rise, being a freelancer meant my employment can often continue, even if my income fluctuated due to those external factors. Freelancing sure beat the unemployment line, but going out on my own wasn't easy—especially in the beginning. My quest to find fruitful freelancing opportunities required a ton of networking, a constant need to keep learning, and the time needed to build my creative portfolio.
My business continued to grow because I invested the time and money needed to become a success. In the end, that’s not much different than what any employee of a company needs to do to succeed.
Today, I tend not to make as many financial mistakes, having learned from my own foibles and those of others. Now, because retirement is nearer than my dearly departed Mustang, I question the necessity of every dollar borrowed. That’s because there's less time to recover from a financial mistake than when I was young.
I don't just write about asset allocation, saving for retirement, building emergency funds, and staying invested when the market's down—I believe wholeheartedly in their value. It took a while, but I eventually learned from my mistakes, and I don't throw good money after bad anymore.
Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917