At 38 years old, I feel like I’ve finally got a grip of my finances. Dave and I budget religiously – we do a long term plan at the start of each year and then edit this ahead of each month according to what money we know we’ve got coming in and our commitments. Dave has worked for the same company since he was 16 and earns a regular salary each month with the potential for a bonus each summer. As I am self-employed, my income is more sporadic – we can have weeks where all the invoices seem to coming in at once and then other times where it feels like I’ve not been paid in ages. Keeping a close eye on our budget and planning months in advance means we avoid the temptation to splurge when I get a big pay day. (That said, we do try to assign the larger payments to specific things like a new dining room window, or finally getting our back garden sorted – both of these are things I’m hoping will happen in the next month or two).
It has taken both of us a really long time, some harsh lessons and significant support from my parents, to learn how to manage our money properly and feel like we know where we are at with everything. With hindsight I guess that yes, there are things I might have done differently, but ultimately the way I’ve lived my life until now and the lessons I’ve learned as a result have brought me to this place and I wouldn’t change that for the world.
When it comes to making and managing money, I think you often have to learn these lessons for yourself. My parents worked hard to teach my the value of money, they gave me weekly pocket money to help me learn how to manage my own funds (and they would never, ever let me spend ahead and borrow money from next week’s pocket money), they encouraged me to get a job as soon as I was old enough (pot washing at a local restaurant aged 14 for £2 an hour). But none of this stopped me getting over excited with a credit card and building myself up a nice little pile of debt in my early twenties. No, I had to learn the hard way that it all had to be paid back in the end.
Of course that’s not to be said that you can’t learn from other people’s mistakes or successes and the guys at Moneyfarm think a lot can be learned from the journeys of the wealthiest people in history and in fact, they believe the top three things you can learn from some of the wealthiest people in history are:
Make the most of the technology available to you
Start as early as possible, but it’s never too late
And just to prove the point, I can easily find examples of all three of those lessons borne out in real life:
- I am currently sitting here at my laptop making a living out of the technology available to me – a living which enables me to work around my family, and one which I find creatively fulfilling.
- My dad made an enormous sweeping career change in his 40s carving out new path which meant he could work for himself.
- Taking risks and working hard meant that my parents moved house with reasonable regularity and climbed the property ladder as quickly as they were able – of course there was a certain amount of luck involved but there was also calculated risk
Much as I think it’s important to learn from your own mistakes, it’s definitely worth looking at what’s going on around you to try and avoid some of those mistakes in the first place! Where have you learned your financial lessons along the way? What would you like to teach your own children?