On Spending and Saving

Last week I met with a financial advisor who is a family friend. I kept putting the meeting off because I felt like what do I need a financial advisor for at 22, but after finally meeting with her, I feel so much better. Most of my life I would say I have been pretty good with money, except for senior year of college when I went a little credit card crazy with clothes and a Mexican vacation that put me in a little over $5,000 in debt (yikes). I figured no problem, I'll be getting my dream job soon so I can pay that off in no time. Life never works out exactly as we plan and instead of a dream job, I was stuck at my low paying retail job with an unexpected pregnancy.

With a baby on the way, I knew my expenses were only going to grow, but after a little begging and pleading, my parents agreed to let me move home for the duration of the pregnancy. For the next four months, any money I had leftover from each paycheck went to paying off my credit card debt and by the time Merle arrived I only had a few hundred dollars left to pay off. Now I'm really cautious when making inessential purchases and force myself to wait at least a few days to mull over potentials buys before shelling out the cash. It takes more than not spending all your money (and then some) to be smart with money.

Meeting with the financial planner helped me think about my goals, personally and professionally, in concrete terms. We broke things down into short term, medium range, and long term goals. Within the next three years (short term), I want to be financially independent, finance a cross country or international move, and have no debt, including student loans. Within the next five to ten years (medium range), I want to be able to finance Merle's education (private school), have a home based business, and if we are lucky enough, have one or two more children. In the very distant future, I want to able able to fully fund Merle's college education, own a house, and have a comfortable retirement. Not to much to save for right? Ha yea right.

In the first few years out of college, you may not be making as much as you hope for, but chances are pretty good that your expenses are also less than they will be later in life, so your early twenties are a great time to start saving up for whatever your future goals may be. It's tough to think about what you are going to want in thirty years, so break your goals down into more tangible timeframes with some more nebulous long term goals floating in the background. You want to save now, so that later on in life you can have what you really want. Starting out young also means that you will have extra years to earn interest on your money, depending on the types of accounts you use. By meeting with the planner I realized that I can achieve my financial goals by being being mindful of what I'm spending and saving right now.

P. S. If anyone in the Philadelphia area needs a financial planner, I know a great one!

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