Dear twentysomething me,
I’m writing this from your future – our future – where the financial view is clearer, less rose-tinted. I – we – are writing this on a laptop you haven’t bought yet, funded by the income generated from a side hustle in digital consulting for creative entrepreneurs.
Who knew you’d one day find your way with words to pay for something better than a fancy yoga mat and a block booking of pilates classes? Daring to dream, combined with a solid bit of business nous, now affords us a substantial passive income.
First, let’s address the knot that tightens your stomach every time you avoid opening a bill. Trust me, ignorance is only blissful until your creditors come knocking. If you want to be money confident, knowledge is your superpower. I wish someone had impressed on you in those anxiety ridden 3am moments that money confidence isn’t about having money. It’s about understanding it. And to understand it, you need to arm yourself with knowledge, especially about your own financial situation. So go ahead, open those bills. Knowing what you’re dealing with puts you in control.
You’re going to make mistakes. Spectacularly colossal ones. And it will take you an inordinately long time to properly develop the discipline of managing your money. That’s because you haven’t got your head around the fact that one pound in your pocket today is worth much more than one pound in our future. The experts call this inflation.
Remember that credit card you got as soon as you turned 18? It took just weeks to hit your credit limit but … well let’s just say it took longer than that to clear it. But try not to think of this misstep as a failure. Sure, there were lessons to learn (how APR works, for one), but this experience also ensured that you quickly learned about the importance of paying off your credit card debt in full each month to avoid paying interest.
In your thirties, your credit card habits – and your credit score – will be a lot better. More importantly, you’ll have a firmer grasp on what you want, what you need and what you can afford. When you know what you’re doing, having a credit card in your back pocket can feel like a lifesaver – especially when you have to quickly jump on a flight to visit your elderly mother in Ghana.
Let me paint you a picture of what money confidence actually looks like. It’s not the fantasy of winning the lottery that you’re imagining. It’s quieter, steadier. It’s understanding that learning to budget isn’t a constraint. It’s more like a roadmap to freedom. Freedom to travel, freedom to treat yourself to that must-have dress if you feel like it and most of all, freedom from unnecessary debt. That’s why you should track where your money goes like you’re a detective solving your own financial mystery.
Start investing now, even if it’s just a little bit each month. It can really boost your confidence, because the compound interest that can accrue on small but steady investments over the next couple of decades could help you towards building a tidy little nest egg by the time you hit your 40s. But only if you stay the course through any volatility in the financial markets. Honestly, I wish someone had taught us about compound interest in school!
Don’t just rely on investing though. Building a rainy day fund will let you walk away from a toxic job or sleep soundly when the boiler breaks down in the middle of winter and you’re facing a £500 bill. Confidence comes from knowing that you can fund an emergency without having to sell your soul or take out a payday loan.
Money confidence doesn’t mean you’ll never make another mistake. In your early 50s, the hustle to build a robust pension before it’s too late will become all too real! But beware, that hustle can also lead you down some financial cul-de-sacs. Just last year I nearly fell for a “sure thing” – a complicated financial scheme that promised the world but set my monetary spidey sense tingling – the deal was just too good to be true. In the past, I would have stayed the course, trying to “fix” it until my bank balance hit zero. But this time, I listened to my gut, stepped away and kept it moving. That’s money confidence for you!
You’re going to be OK. Better than OK, in fact. As you grow into your 50s, you’ll take bolder but rock-solid strides to shore up your financial future, one calculated decision at a time. It’s never too late to start because building your financial solidity is a discipline, so trust the process just like you do when you’re strength training in the gym.
Keep going. Keep learning. Money confidence doesn’t just happen. It comes slowly and steadily, then suddenly, just like those muscles. But every now and then, buy yourself something frivolous just for the hell of it, because financial wellbeing is also feeling secure enough to enjoy those little extras.
With love and hard-won wisdom,
Your future self
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