I'm no expert and don't claim to have all the answers but here are some things I wish I started doing in my early 20's (I'm 36 now) and some things that I actually feel like I got right. I'm going to break this up into a few categories, but hope something here helps someone out.
Housing
- I wished I lived at home for a couple years after college. I would have been fortunate enough to have had an essentially free place to stay, meals, etc. This would have been enough time to save up a 6-month emergency fund, max out my 401k for a couple years, and buy reliable transportation in the $10-12k range without a loan.
- I struggled through the roommate thing after college as I'm super neat and appreciate a quiet home after a long day at the office, so when the time came to buy a house I was chomping at the bit. However, I was really good to not just assume I could afford the same type of house that my friends or colleagues at work were buying. For me, I wanted to be able to pay my mortgage and escrow (taxes and insurance), plus all my utility bills with one paycheck a month. I also decided that a 30-year mortgage was crazy with all the interest I would end up paying and I had to afford something that met all the aforementioned preferences and via a 15-year loan.
- Along the same lines of the above, I avoided upgrading my home when I started making more money just to keep up with the Joneses.
Auto
- This has been my biggest struggle up till now. In my early 20's, I bought a brand new car that actually cost more than my yearly salary. Sold it 18 months later and lost nearly $10k. Just last year I bought a car that was roughly one third my salary and while I could afford it, I hated making the car payment each month when that money could be going to pay off my mortgage faster. I luckily was able to sell it, pay off the loan, and buy a used SUV for $15k that I own free and clear...I will never again have a car payment. I'm now putting money aside each month specifically for auto maintenance and/or a new car every 7-8 years that will be paid for in cash.
Living - I'm just going to rapid fire these as I don't think they need much explanation, but happy to answer any questions.
- Develop cheap hobbies.
- Limit going out drinking with buddies to once every other week.
- Limit going out for dinner to 1-2 times per week.
- When going to dinner with a group, I always eat a little something an hour before. This way, I'm not as hungry. For me, this means I'm not as likely to order the steak dinner and go with a salad.
- Use Keepa for all Amazon shopping.
- I do all my errands really early in the morning or at night as I live in an area that has lots of traffic. Less stressful and less time idling and wasting gas.
- Take care of your things, especially clothes and shoes. I average a pair of sneakers every two years. My dress shoes should last me 7-10 years and can be resoled. I only buy clothes from outlet stores.
- Look around your house and sell shit you don't need or aren't using anymore. Last year, I sold 40 things over a 2-3 months process and made over $2500. None of the things I sold were things I used regularly.
- Be maniacal about your electric bill. I only use my heat or AC if it's below 60 or above 80 in my house. I also bought a Nest thermostat for the sole purpose of controlling the temp in my house remotely. I have remote control outlets on every device that uses energy when not in use so I can completely shutoff the power to it. I also have a powerstrip that automatically shuts off power to my soundbar, receiver, etc. when the TV is turned off. All my lights are LED.
- Fill your fridge with gallon jugs of water if you have free space. This will help maintain the temp of your fridge each time you open the door and will require less energy.
- I live by myself and never run the dishwasher. After I'm done with a plate or something, it's a quick wash and rinse and then place it in the dishwasher to dry. Then when I need a cup or plate, I just grab it from the dishwasher.
If I think of anything else, I'll add it to the comments.
April 29, 2018 at 10:22PM
