5 Financial Lessons That Changed My Mindset About Money

Do you remember the time when you had a turning point in your life about your finances? I was 26 yrs old when I had my worst financial failure. after series of traveling I wasn’t able to manage my finances well. I spend more than I could earn and went back to the Philippines completely broke. After that situation I started to save up again and I promise to change my mindset about money and my finances in general.

As the milestone of turning 30 approaches, it signal a phase of my life that marked the increased responsibilities, career advancements, and a deeper understanding of personal priorities. Among the crucial aspects that demand my attention during this point is having a better understanding of my finances.

Learning to navigate the complexity of personal finance has become more imperative than ever. As I reached the age of 30, a well-rounded financial strategy isn’t just desirable; it’s a cornerstone for building a secure future. In this pivotal period, learning and then mastering the art of financial management is akin to equipping myself with a compass for the journey ahead, ensuring that each of my financial decision will aligns with my aspirations and sets the stage for a resilient and fulfilling financial future.

Here are the 5 Financial Lessons that I’m mastering when I turned 30:

Discipline in Budgeting:

Turning 30 often brings about a heightened awareness of the need for financial discipline. Creating and sticking to a budget is not just about tracking expenses; it’s about developing the discipline to live within your means. 

One of the practices that I’m doing is creating my whole year budget ahead of time. I already create a projection of how much money I can possiblly earn next year, then I allocate these budget on different categories like rental fee, utilities, grocery, shopping, travel, insurance etc. Having these tool makes my life easier when I started to plan my budget.

This practice involves understanding the importance of prioritizing needs over wants, making informed financial choices, and being accountable for every money that I spent.

Prioritize Saving Over Spending:

I’ve been working for 12 years and with the accumulation of work experience and increased income, it’s crucial to shift the focus from spending the entire paycheck to prioritizing saving and investing. 

To make sure that I will hit my target saving, I follow the easy to say but hard to do logic which is income-savings=expenses. Most of you will agree that its really hard to save money and what we usually do is the other way around—income-expenses=savings. To make sure that I will hit my savings goal, when I receive my income I set 25%-30% of it straight to my savings. If you need to calculate how much you need to set aside daily, monthly or quarterly to achieve your target savings, you can simply click this link for an easier and faster computation.

This lesson emphasizes the significance of building a financial safety net, contributing to retirement accounts, and investing for long-term goals. It’s about cultivating the habit of paying yourself first before allocating funds for discretionary spending.

Set Realistic Financial Goals:

Part of the budgeting that I disccused earlier is setting a realistic financial goals. Because it wil make things easier for me to make sacrifices or stick to a budget because I know what outcome I’m striving for and help me keep focused on the long term.

As I enter my 30s, it’s the time that I reassess and redefine my financial goals. This lesson involves setting realistic and achievable objectives that align with my life stage. Whether it’s saving to buy my new house, investing for business, or planning for a local and international travels getting real about my financial goals means creating a roadmap that guides my financial decisions and actions.

Confront and Manage Debt:

I make it a habit to have the feeling of excitement whenever I paid my credit card bills. Once I narrowed down my budget and determined which credit card to pay off first and pay it, its giving me a feeling of fulfillment. I no longer fear to use my credit card because I now that I have discipline on paying it. 

Understanding and managing debt becomes increasingly important in my 30s. This lesson is about confronting my debt situation head-on, whether it’s credit card debt, or other liabilities. Taking control of debt is a key step towards achieving long-term financial stability.

Build a Robust Emergency Fund:

Having an emergency fund is one of the foundations of a financial stability together with getting a life insurance, health insurance and building an investment. These are the four things that I need to make sure that is stable before I decide to jump into big financial decision like buying a house or a new car.

 Establishing a strong emergency fund is a crucial lesson in financial preparedness. Life is unpredictable, and unexpected expenses can arise at any time. By setting aside three to six months’ worth of my living expenses, I create a financial buffer that can help me weather unexpected challenges without compromising my long-term financial goals. This lesson involves recognizing the importance of liquidity and financial security.

The choices we made when we reach our 30s lay the groundwork for long-term financial well-being, influencing everything from career decisions to family planning. By taking charge of our finances once we reach our 30s, not only establish a solid foundation for our present but strategically pave the way for a future defined by financial security, meaningful investments, and the pursuit of our life’s aspirations.