Growing up, many of my views towards money were shaped by my parents.
I knew the importance of being thrifty and spending below my means.
But talking about money wasn’t common, especially when money still seemed like a taboo topic to discuss.
Not having money conversations kept me in my own bubble, which made me ignorant of a lot of financial knowledge and perspectives which I wish I had known earlier.
It was only after I started doing my own research and learning from like-minded individuals that I got to accelerate my knowledge of personal finance.
While there are endless things to learn about personal finance, I now look back at my own personal finance journey as I near the big 3 0, and I can see how different my money perceptions are as compared to just a couple years ago.
Here are some financial lessons I learnt in my 20s.
TL;DR: Biggest Money Lessons I Learnt in My 20s
1) Set Clear Financial Goals
2) Be Open to Talk About Money and Learn About It
3) Build a Healthy Relationship With Money
4) Surround Yourself With Like-Minded People
5) Learn the Importance of Growing Your Money
6) Money Can Be Replenished, but Our Health and Life Cannot
1. Set Clear Financial Goals
When I was younger, I thought that what I had was a clear financial goal.
Which was just to be thrifty and save as much money as I could.
It felt like as long as I was doing that, I would be inching towards what I was aiming for.
While that technically wasn’t wrong, I realised that knowing exactly what I was working towards was much more helpful.
For instance, setting my goals in terms of short, intermediate and long-term goals allowed me to peg specific figures to these goals and work towards them.
An example of a goal could be saving for your first home, where the amount required could be calculated along with a set timeline.
In addition, having these specific goals allowed me to review my progress and update them accordingly.
2. Be Open to Talk About Money and Learn About It
As many views towards personal finance have already been shaped over the years, I initially had difficulty accepting new opinions that were drastically different from mine.
It didn’t help when talking about money is usually a social taboo as well.
Over time, as my own interest in personal finance grew, I started having more money conversations with people around me.
That was when I realised that it gave me the opportunity to broaden my perspectives towards personal finance.
Keeping an open mind allowed me to be better informed of financial matters and improve my financial literacy.
Since there is no structural system around to teach us about personal finance, talking to people about money was my fastest way to gain financial knowledge.
3. Build a Healthy Relationship With Money
In the past, it was easy for me to feel guilty whenever I had to splurge on something.
This is because I thought that by saving as much money as I could, I would be considered as taking control of my finances.
However, I was actually having an unhealthy relationship with money.
I couldn’t spend what I earned freely, and anything that was spent ‘frivolously’ would be accompanied by guilt that this money could go somewhere more significant or important.
Over time, I realised that such a mindset wasn’t sustainable at all.
Spending shouldn’t be viewed as something sinful.
I started setting aside a sum of ‘fun money’ after I allocated money to my other financial goals.
By deliberately setting aside a sum of money for miscellaneous spending, I could now spend without worries while still meeting my financial goals.
In short, it is important to know the ‘why’ when you are doing something.
My relationship with money felt a lot more purposeful, and I felt more in control and a lot less stressed as well.
4. Surround Yourself With Like-Minded People
As we grow older, our social circle naturally starts shrinking.
This mostly happens as we start focusing our time and energy on things we prioritise and select relationships that generally align with us.
What I realised is important is to surround myself with people who share similar values with me.
With the popular saying ‘You are the average of the people around you‘, the people we hang out with do have a huge influence on us.
In fact, a study on social influence was once conducted by Nicholas Christakis and James Fowler, who ran this study for 20 years.
They found a real cause-and-effect relationship between friends and how attitudes and behaviours of the people around do have a significant impact on us.
This actually extends beyond personal finance and includes areas like personal development.
By spending more time with people you are aligned with or would possibly like to become, you can accelerate your personal growth in the direction that you wish for.
5. Learn the Importance of Growing Your Money
Investing was a really foreign topic for me in my early 20s.
I was never surrounded by people who invested and not being exposed to investments also meant that I never saw the need for it.
My initial reluctance towards any changes to my personal finance mindset also caused a delay in my understanding of investments as well.
It was only after I started earning my own keep that I realised that depending on savings alone would never be enough.
When I first understood how my money would depreciate if I were to keep them all in a regular bank account, I was mortified.
Inflation was a monster we all had to fight over the years.
Because I took some time to realise how important the knowledge of growing my money was, I missed a couple of years on the investment train.
If you do not want to make the same mistakes as I did, do look at growing your money as early as possible!
(Psst… If you need help with starting your investment journey…)
6. Money Can Be Replenished, but Our Health and Life Cannot
I used to chiong (Hokkien: rush for) part-time jobs when I was younger to earn my own living expenses while I was still schooling.
One of my waitressing jobs left me with a sore backache, but I shrugged it off because… money.
I left it unattended, and it manifested into something that is, unfortunately, still sticking with me now.
As I grew older, it got more common to hear people around me losing their loved ones to illnesses and health complications.
Sh*t got even more real when my loved ones were struck with illnesses out of the blue, and when such moments happened, nothing else would seem to matter.
Having financial security is definitely useful in such situations, but it isn’t worth it to drown ourselves in the pursuit of money and miss the little things that are truly important in life.
Remember to focus on what is meaningful to you and spend some time on what makes you feel fulfilled.
Closing Thoughts: Personal Finance Is a Very Personal Journey
Learning more about my own priorities when it comes to money was a liberating experience.
The lessons that I gained through the years have also slowly shaped me into who I am today, and this journey of learning has indeed been an interesting one.
Money will always be one of the big topics we have in our lives, and what we feel is important to us might not be of priority for someone else.
But as long as we are willing to keep an open mind towards our finances and continue to gain fresh perspectives and knowledge, it will be much easier for us to have a healthy relationship with our money.
Talking about money is also no longer as intimidating anymore; we can even check out what others have to say about it now…