15 Personal Finance Lessons Everyone Wishes They Knew Sooner

You know how they say it's never too late? Well, that's not entirely true, right? Sometimes it is too late, and you do not want to be that person who has that kind of realization. A survey by Bankrate found that 57% of people in the US feel behind on their retirement savings. So think of this as your financial wake-up call. Today, we're diving into 15 lessons about personal finance that everyone wishes they'd learned sooner because small lessons can lead to a big impact.

This is for you if you're just starting out, or if you're trying to recover from your mistakes and want to give yourself 15 high fives because you already know all of these lessons. It's the perfect map to take control of your financial road map, so let's go.

Number one: You pay for your freedom now with worry later. Some people believe it's okay to wait until later in life to start saving for the future because they'll have more money then. But no, you won't. Your lifestyle inflates with your earnings. Let's just go back to your early years for a moment.

You're in your 20s or 30s, and life is good. You're spending on vacations, new clothes, and gadgets, everything you want, because you're thinking: I'll deal with savings later. But fast forward 10 to 20 years, and you're now staring at your bank account, realizing you've got nothing saved for emergencies or retirement. Now the stress kicks in.

Look, okay, here's the deal: if you choose to live it up now without thinking about the future, you're setting yourself up for stress later in life. That financial freedom you're enjoying today comes at a cost. Okay, your future peace of mind—that's the price. It's like Warren Buffett says: don't save what is left after spending, but spend what is left after saving.

Number two: An early foot in the game is better than sprinting to catch up later. When you're younger, investing small amounts seems pointless. What difference is it going to make anyway? Besides, it's easier to tap your card and get what you want than it is to transfer to your investment account. It's only later, though, you realize what a big difference that small amount would have made.

Firstly, even if it was just $10 a month, you'd have much more saved than if you had put nothing away. But more importantly, the compound interest bug would have bitten you. You would see your money increasing, and then increasing again according to that increase, not according to your initial investment. Once that compound interest bug bites you, you don't have to work so hard to make yourself follow the rules anymore because you would enjoy it.

And it's only when you start later in life you realize how much fun investing can be that you think: why did I not do this sooner? Speaking of not doing things sooner, number three: hopping on the financial literacy train sooner. Benjamin Franklin said it best: an investment in knowledge pays the best dividends.

There are complicated parts to money management—tax claims, savings, and investments, sure, and that complexity can make you think that the world of money just doesn't go with the way your brain works. But later on in life, when it's crunch time, most people find out that it doesn't have to be that complicated. There are so many different ways to learn about how to manage your money that you can choose how deep you want to dive down the rabbit hole.

You'll have to experiment at first with finding the right YouTube channel that speaks to you (hello, that's us!), the right book or author or speaker. But once you do, all of those puzzle pieces fit into place. Then the finance and investment world gets exciting, and it makes you wonder why you thought it wasn't for you in the first place. The sooner you start learning, the sooner you can find a strategy that works for you and a resource that speaks to you.

Number four: Getting a credit card with rewards you actually want. Most people go through a similar arc when it comes to the story of their credit card life. You get your first credit card, you know you should be careful—or maybe you don't know—but the idea that you can just get whatever you want is so tempting that you go down into that debt hole.

Before long, your daily expenses and big purchases go on that credit card. Your lifestyle inflation goes up, and then you're in debt. For a lot of people, when they get that debt paid off, they never want to see a credit card ever again. It's like a little devil on your shoulder. But in the next part of your journey, you learn that if you can get a credit card with rewards that work for you and you can impose proper limits on those cards, well, you can reap the benefits.

For example, if you travel a lot, you can earn points with your credit card. You'll be getting first-class flights, lounge visits, and discounted hotel stays in just a few years.

Number five: Getting a small piece of a big pie. Now, the idea that you need a ton of money to invest is outdated, especially when you've got access to fractional investments. You can buy a slice of Amazon or Google shares for as little as $10. You can get yourself in the game without waiting for a big windfall.

There are apps out there like Robinhood and M1 finance that allow you to start your investments with just a dollar. And there are tools like Masterworks, where you can get fractional shares of artwork from some of the most renowned artists in history. If you're buying art outright, you'll need anywhere from $10,000 to millions of dollars, depending on the artist and the piece. But with an ace up your sleeve, you can get in the door without it costing you a fortune.

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Number six: You don't need money rules, you need guards for those rules. You get paid, your bills come off at different times, and by the end of the month, you still owe people money, but you've spent it all. So where did it go? You intended to save or pay your bills first, yet somehow you spent it.

Your fun spending is mixed up with your obligations, and you just go buck wild. Suddenly you're using money meant for rent or groceries on takeout or impulse buys, and it's causing a lot of stress. So many people have been through this, but as you get older, you learn there will be times when you break your own financial rules because you've fallen to temptation.

So you learn that you don't just need rules; you need some guards around those rules. Having separate accounts for your bills and your spending will act as a great guard. One account is strictly for your non-negotiable expenses—rent, utilities, groceries, insurance, loan payments, gas money. The other is your fun-for-spending account—eating out, entertainment, shopping, that kind of thing.

After payday, the first thing you do is transfer the exact amount you need for all of your bills and essentials into your bills and essentials account. Whatever is left over after everything else is taken care of, that's what you can put into your spending account. But if you really want to be keen, put it into investments instead.

Number seven: Your prime directive flowchart. Read it, understand it, and follow it. Listen, okay, there are so many strategies out there you can use to learn how to budget, and you'd think that with all the strategies, you would find one that works for you the moment you started looking, right? But alas, no, that is not the case. All of the choices can make our lives harder, right?

So we're going to simplify this for you based on the feedback from what successful people say they wish they knew sooner. Your prime directive flowchart is a clear visual guide to the things that you should prioritize when it comes to money. Should you pay off debt, save for an emergency, or start investing? It can be overwhelming to know where to start first.

So that prime directive flowchart simplifies it for you. It's a clear roadmap that tells you what to do next. And you know, a Fidelity study showed that people who have a clear financial plan are twice as likely to feel confident about their finances. You need to start with the simple, easy-to-use tools—something that's not going to scare you away from taking the next step.

The easier you make your decision-making, the less you're going to rely on willpower and guesswork. It'll all be laid out for you; all you gotta do is follow the plan.

Number eight: Saving for retirement earlier. Now you probably guessed this one would be here, and if you're already saving, no matter how big or small—honestly, well done! You have got to start today. There is a story out there about a 70-year-old woman who packed up her old life and moved to Singapore many years ago to teach English. She was making great money, her apartment was subsidized, and she was going on multiple holidays a year, flying first class and staying in the best hotels.

She had gorgeous designer clothes and ate out with her wealthy friends every evening. And then she got older. By the time she was 70, she couldn't work anymore, and she had no money left. She ended up living in shared housing, looking for work and scraping by with whatever money her kids could help her out with.

That's all you need to know—nothing complicated here, okay? Don't be one of those people looking back with regret when you should be enjoying your old age. Don't blow it all in your youth and leave nothing for yourself later on.

Number nine: Nobody really cares what car you drive. You know, we live in a delusional world in our own minds where we think people care way more about us than they actually do. If you've got a great car, someone might have a passing thought about it; maybe you'll get a high five, and then they'll forget about you entirely.

Young people think their car is a direct representation of their success, but when you get older, you realize how embarrassing that thought is. People don't have enough time to care about the materialistic part of you. It doesn't make them love you or like you any more or less.

If you're getting a fancy car for you and you can afford it, and you're, like, a car collector or whatever, go ahead—if it's your passion. But if you're doing it to look good for other people, we're just going to suggest that you spend the money on some therapy instead to work on your self-esteem. You'll get a much better ROI on that later in life.

Number ten: Tomorrow's big benefits from today's small cashback programs. Imagine you're at a restaurant, and you pay for your meal, and the waiter says, "Oh, we've got a cashback program! You spend $50, so here's $3 back; just sign here." And you say, "Nah, what's $3 anyway? Forget it." You do that four times a month for about 10 years, and you've just said, "Nah, forget it" to $1,440.

You could have put that money into a compound interest account, and then you'd have over $1,900. When you're saying no to cashback programs, you're not walking away from the amount on the table right now; you're walking away from everything you could have made in the future too. You can play the long game without actively participating in every decision. It's going to happen with or without you, so you might as well get all of the benefits.

Number eleven: Not understanding high-yield savings accounts versus checking accounts. So many times, people have told us, "I used to hear about high-yield savings accounts, but I thought they were just savings accounts." Listen to this, okay? In the US, only 22% of Americans are earning an annual percentage yield of 4% or more; the other 80% are lower or nothing at all.

Typically speaking, when you're paid, you're paid into your checking account. That's basically like a parking lot for your money; nobody's looking after it. It rusts, molds, rain gets in, and it just sits there doing nothing. But a high-yield savings account is like a nice garage for your money. It's a little more protected, and someone comes and gives it a clean every once in a while, so you're not constantly losing value.

Take your money out of your checking account and put it into a high-yield savings account. Even if you earn 4% interest, okay, it is something. It's not a fortune, but it will add up over the years. That's money that could have been working for you without any extra effort. The switch is simple, but the impact is very real.

Number twelve: Most high-level career people aren't geniuses. No, they had laser focus. It's a wild moment when you look around and realize that your bosses, who have more money and a better title than you, are most definitely not smarter than you.

That person with multiple real estate investments, the one who talks about mutual and dividend funds, they're not geniuses; they just had laser focus. Businessman Arnold H. Glasgow's description is slightly more vivid: success is not the result of spontaneous combustion; you must set yourself on fire. Those people—well, they set themselves on fire metaphorically speaking, of course.

They put in the work, stayed consistent, and didn't get distracted. Success at the top levels isn't reserved for the smartest; it's for those who can focus, stay the course, and avoid distractions. If you can focus on one area and really master it, that's often far more valuable than trying to be a jack of all trades.

Number thirteen: Desiring money isn't being greedy; it's wanting opportunities and security. It's a shame that we criticize the pursuit of wealth so heavily. A lot of media and probably even your friends and family might make snarky comments about how obsessed you seem with making more money.

Yet if you asked them, that's the one thing they would change in their life: they'd say a million dollars, right? Maturing is realizing you don't have to be ashamed of wanting more money and wanting to be successful. All you actually want are more opportunities and better safety and security for you and your family. As long as you do it fairly, you should be proud of those goals.

It's not the money itself that you're after; it's what that money provides: security, options, and the ability to live life on your terms. And on that note, number fourteen: Making more money is better and easier than cutting costs. Because let's be honest, okay? Cutting costs can be suffocating; it literally sucks the joy out of life.

Some people can do it and live frugally and love it, and good for them, but it is hard. And all you keep hearing about is how you need to cut down costs. As you get older and gain more experience, you realize there are times when being militant about money is good, and then there are times when it can affect your mental health.

You start to see that it's just better to focus on making more money and keeping your lifestyle where it is now instead of inflating it as soon as your income inflates. It's easier to make more money than it is to cut down costs, especially when you've already cut as much as you can. You can only cut so much. If you're always focused on pinching every penny, you miss opportunities to earn dollars.

So find ways to increase your income—side hustles, salary negotiations, business ventures—because making more money will get you further than constantly trimming your budget. You have to think bigger.

Number fifteen: Only lend money to people you're okay with if they never pay you back. Because let me tell you, many a relationship has been lost in the land of unpaid loans. As you get older, you'll learn that even your closest family members and best friends will ask you for a loan, promise to pay you back, and never do it.

No matter how many times you tell them you need that money back, that your rent is due and it's affecting your financial situation, they won't seem to understand or care. You just—you don't know how much people will change when money and desperation join the chat. So learn this one now: only give them money when you know you'll be fine if you never see it again.

If they pay it back, great. If not, well, you knew the risk going in. This way, no hard feelings and no financial strain.

And that's it from us today, Alexir. We'd like to do something different. We would love for you to provide the bonus number sixteen: What do you wish you learned sooner? Let us know in the comments and enrich the community with your answer. We'll all learn and grow together. We'll see you back here next time, Alexir. Until then, take care, my friend.