The 3 Most Important Money Lessons I’ve Learned Before my 30th Birthday

This past Thursday was my 30th birthday. Whoo hoo! Light the candles! Although I had to adjust my original plans due to the COVID-19 epidemic I took some time to think and realized ‘Wow, I’m the most financially secure place in my life right now’.

I may not be a millionaire…yet! I haven’t completely paid off all of my debt. I’m just shy of making six figures. But I am financially secure. I have a steady career. I have a Roth IRA, a 5 month emergency fund and I’m able to pay all of my bills every month while comfortably being able to save money for a rainy day.

I didn’t get here overnight and had to go through a lot of bad jobs, dealt with some lackluster relationships, and credit card debt. By adopting a growth mindset, learning about financial independence and surrounding myself by people who support my goal of early retirement I’ve gotten to a stable place where I’m comfortable talking about money. Here are the three most important money lessons I’ve learned before my 30th birthday.

Avoid Excessive Lifestyle Creep as Much as Possible

I grew up in a working class family and I would remember some friends that always got large allowances, lived in huge houses and got everything they wanted. After I graduated from college, I was tired of living like a broke college student. I wanted to also ‘graduate’ my lifestyle to match my new, shiny Bachelor’s degree. I really wish that I knew living like a college student for five more years would have helped me pay off my student debt and save money even faster. But, I digress…

My group of friends and I ended up living and working outside of the same city in Texas. We all started renting nicer apartments with marble countertops, upgrading our cars, going out to eat, and spending money without too much thought. I didn’t notice the lifestyle creep at first because we all thought that now we have a full-time job with a steady paycheck we could afford to buy what we wanted. I allowed my housing, food, insurance, and debt payments to creep past half of my monthly income. I wasn’t aware of the 50/30/20 rule back then. I thought that if I could pay all of my bills and have enough money in my checking account to last me until my next paycheck I was good! Beyonce is having a concert next month? I’m there! Everyone is going to a bar with pricy drinks to hang out? I’m there! There’s a cruise on sale for October and I can put it on my credit card? Done! I fell into what is commonly known as the hedonic treadmill or lifestyle creep.

Looking Rich Isn’t the Same as Being Rich

This one shouldn’t be a surprise. But for most of my 20’s I saw wealth as being material wealth. A nice car, a nice house, fancy clothes, and enough cash to be able to buy a few things here and there. I’d always known how important it was to save from my parents but never had enough money to save more than $100 here and there until the past few years.

It wasn’t until I had been working a corporate office job and started listening to my co-workers, most of which was at least ten years older than me (or more) that I realized most people are living paycheck to paycheck too! It wasn’t just people in their 20’s but most people in general. The same co-workers with brand new cars, $500 purses, and who ate out at lunch every day didn’t have enough money to pay for new tires. Or enough money to pay for an unexpected plane ticket to visit a mother or father who was in the hospital. This led me to start reading about personal finance, savings, and come across multiple studies that shared over half of the middle-class Americans are living paycheck to paycheck. Not only that, but most middle-class Americans didn’t have enough money to cover a $400 emergency. This job where I was the youngest person in the office taught me that looking rich isn’t the same as being rich. It seemed as if they had their life figured out and their clothes, phones, and automobiles were a visible marker of their wealth. If I wanted to not repeat the same mistakes as my coworkers I had to not worry about looking rich by avoiding the common pitfalls. I needed to cut out unnecessary spending, save money, and learn how to invest in my future.

Prioritize Debt Payoff, Saving and Investing Money

A few years after my epiphany and after traveling while working remotely in Southeast Asia and Turkey, I returned to the US. I had avoided living paycheck to paycheck, embraced living a more minimalist lifestyle (since all my belongings were in a suitcase, backpack, and a purse) and by now learned that looking rich wasn’t the same as being rich. I had learned more about myself and knew that buying cute clothes and a brand new car wasn’t going to make me happy. I was the happiest when I lived simply, ate street food, went hiking, and had time to enjoy being with my friends and family.

I had enough money to last me one month without working but I still hadn’t started investing yet. I needed a budget and a plan. I had started seeking out experts in debt paydown , frugality and investing. It’s no surprise that I first found Dave Ramsey on this journey. Listening to Americans call in and cry about their money failures (or wins) was daily motivation for me to avoid lifestyle creep. I had less posessions and being frugal came easier to me. I learned how to set up a budget, learned about compound interest, and that one day I too could become a millionaire!

I started a new career in technology sales and started a new relationship. I knew that I didn’t want to work forever and decided to start by paying off my high-interest debt, save more money in my emergency fund, and invest money in retirement accounts. At first, I didn’t even realize that there was a possibility to retire early. I started becoming tired of learning the same lessons about money, debt, and investing that I got from Dave Ramsey and stumbled upon the FIRE (Financial Independence Retire Early) movement. This was exciting! There were people that were being frugal, finding creating ways to increase their income, investing large sums of money, and then living life exactly the way they wanted to. And people were doing this much earlier than 65. I had an aha moment and knew this was what I wanted. I enjoyed having the freedom to travel, read books, and do whatever I wanted wayyyy before I turned 65. I knew it was possible from working part-time while traveling the world but I wanted to live that life of freedom to choose what I wanted to do without the working part. I decided that early retirement was for me and it wasn’t too late to start in my late 20’s!

I’m still learning new money lessons, trying to hack my savings rate, and make occasional discretionary purchases here and there. And that’s okay. I think that most importantly I am aware of where my money is going, I make sure I always meet my savings and investment goals, and I am more conscious of what actually makes me happy.

Did you relate to my three money lessons? Do you have anything to add? If so, please comment below to share!