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💰 3 Lessons I've Learned So Far
Preston Victory
August 28, 2024
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Welcome, Future Early Retirees.
I've been navigating this adulting journey for a little bit while now, and boy, have I learned a lot! Today, I want to share a few of the biggest lessons I have learned so far and how they have changed my approach to personal finance.
In today’s newsletter:
Tracking your expenses
Let me be brutally honest here - this lesson took my wife and I way longer to learn than it should have. We'd set budget goals with the best intentions, only to end up frustrated and confused at the end of each month. Why? Because we were flying blind!
We could see our total spending, sure, but we had no clue where our money was actually going. Looking back, I cringe at how naïve we were, thinking we could just "be careful" and magically achieve our financial goals.
The solution? We bit the bullet and started tracking every single expense. And let me tell you, it was a game-changer!
Here's what we did:
Went through each transaction and assigned it a category
Analyzed our spending patterns
Identified areas where we were unknowingly overspending
Is it time-consuming? Yes. Do you need to do it forever? Not necessarily. But while you're chasing ambitious goals or trying to overhaul your spending habits, tracking your expenses is non-negotiable. Trust me, the insights you gain are worth every minute spent!
Key Takeaways:
Initially, my wife and I struggled with budgeting because we lacked visibility into our spending habits, leading to frustration and confusion.
By meticulously tracking every expense and categorizing transactions, we gained valuable insights into our spending patterns, which helped us identify areas of overspending.
Although tracking expenses can be time-consuming, it is essential for achieving financial goals and improving spending habits, and the insights gained are invaluable.
Personal finance is not black and white
I used to be that person who only saw dollar signs when making big purchases. Cost was my only consideration, and I'm not proud to admit that I often ignored how others felt about these decisions. But I've learned that personal finance isn't just about numbers - it's about life, relationships, and finding balance.
Individual Circumstances Matter: What works for one person might be a disaster for another. Your financial decisions should align with your unique goals, values, and situation.
Emotional Factors Play a Role: Money decisions are often tangled up with emotions. Learning to recognize and manage these feelings has been crucial in making more balanced choices.
Flexibility is Key: While saving for the future is important, I've learned to appreciate the value of enjoying life in the present too. It's all about striking that sweet spot between responsible planning and living in the moment.
Key Takeaways:
Personal finance goes beyond numbers, involving life, relationships, and balance. It's important to consider individual circumstances and align financial decisions with personal goals and values.
Recognizing and managing emotions is crucial for making balanced financial choices.
Flexibility in financial approaches allows for both saving and living in the moment.
There is always more to learn
This shouldn't come as a shock, but it's worth emphasizing. When I look back at what I know and understand now about finances and life in general, I'm amazed at how much my perspective has shifted. Just when you think you are starting to figure it all out, you learn a something new. That’s a good thing!
Continuous Education: I've made it a habit to stay informed through books, podcasts, and other financial blogs. This ongoing learning has introduced me to many new strategies and ideas. Some of which, I have started using myself.
Networking: Engaging with others who are passionate about personal finance has been incredibly valuable. Whether it's online forums or local meetups, sharing experiences has broadened my understanding.
Adaptability: As I learn more, I've become more flexible in my financial strategies. What worked for me a few years ago might not be the best approach today, and that's okay!
Achieving your personal finance goals, whether that is financial independence or something else, is a marathon, not a sprint. Every lesson learned, every mistake made, is a step toward a more secure and fulfilling financial future. So, keep learning, stay flexible, and don't forget to enjoy the journey!
Key Takeaways:
Staying informed through books, podcasts, and blogs has expanded my financial knowledge and introduced new strategies that I actively apply.
Engaging with like-minded individuals in personal finance, both online and in person, has enriched my understanding through shared experiences.
As I gain new insights, I remain flexible in my financial strategies, recognizing that past methods may need adjustment for future success.
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