What I Wish I Had Known About Money When I Was Younger

By The Welch Group

Having a good understanding of personal finance is crucial to experiencing financial freedom and success. The sad truth is that financial literacy is not typically taught in schools or families, leaving individuals responsible for learning about and implementing sound financial habits throughout their lives, from their first post-college job to retirement.

As a young professional who may be newly launched into your career, you likely feel excited to earn more money. It’s a new time of life where you can access financial resources in a way you never have before. As tempting as it may be to spend it on your wish list,, now is the perfect opportunity to create healthy financial habits, allowing you to achieve the financial freedom you’ve always envisioned

Here are a few insights created by our team to help guide your steps toward a healthy relationship with money so you can stay on track through your working years toward a comfortable retirement.

Spend Less, Save More

It’s easy to get caught up with buying the next best thing. And if you are not careful, this carefree behavior can evolve into spending habits based on “keeping up with the Joneses” instead of careful financial planning.

Some people in their 30s come to me strapped with credit card debt they regrettably took on in their 20s. They feel frustrated to still be paying off the debt they incurred when they were younger instead of investing in their future. It’s always good to implement good spending habits early in life, which may mean holding off on non-urgent purchases and building into your savings account.

Invest Early, and Let Interest Compound

As the old saying goes, the best time to invest is yesterday, and the next best time is today. The single best thing you can do to have enough money to retire comfortably is to invest early and often.

Compounding interest refers to the practice of reinvesting the interest earned on an account, thereby creating a cycle of increasing gains over time. It allows not only the initial investment to generate earnings but also the reinvested interest to start working for the account holder over time.

For example, if you saved $6,500 each year (which is currently the annual Roth IRA contribution limit in 2023) from ages 25 to 60 and invested in a portfolio that averaged annual returns of 7.5%, you could have over $1 million dollars in tax-free money. 

By taking advantage of time and compounding interest, you can experience the best and fastest way to move toward your goals and have the resources you need for a solid and stable retirement future.

Dollar-Cost Averaging

The investment strategy known as dollar-cost averaging (DCA) reduces the impact of volatility when buying or investing a large amount of a financial asset. It minimizes volatility risk by attempting to lower the overall average cost of investing.

Rather than make one single lump-sum investment, DCA involves dividing the amount into smaller sums and regularly investing them at predetermined intervals until the entire amount is invested.

By using DCA, the risk of investment can be reduced, and capital can be preserved to minimize the impact of a market crash. This approach also helps to maintain liquidity and flexibility in managing an investment portfolio by preserving your funds.

Create a Financial Plan and Adjust it Accordingly

Many people mistakenly see the creation of a financial plan as extraordinarily complicated, but it doesn’t need to be. In fact, your financial plan when you are younger can be as simple as creating a budget, sticking to it, and investing for your future goals, such as retirement.

Many people also mistakenly see a financial plan as set in stone. However, once you establish a financial plan, you can and should review it frequently and adjust it to match your new financial situation, especially as your career evolves. Financial plans and wealth management strategies will shift with you and your family over time. Perhaps you are making a better salary and want to invest more toward your retirement, or maybe you want to invest in real estate. Your financial plan needs to be fluid to account for life changes.

Partner With a Trusted Professional

Developing healthy financial habits early on is crucial and can set you up for future success, but it’s also never too late to take charge of your wealth management. At The Welch Group, we’re here to assist you in pursuing your financial goals during your working years and as you approach retirement. To learn more about what we do and how we can help, explore our website and schedule a complimentary consultation.


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