15 Money Lessons I Wish I Knew in my 20s (minimalist mom) — Transcript

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1. 0:00We don't talk about money. It's still
2. 0:02such a taboo topic. We look around and
3. 0:04we think everybody else is doing so much
4. 0:06better than we are. But I think the more
5. 0:08we learn from each other, the better
6. 0:10because money is a tool and it's
7. 0:12something that impacts all of our lives.
8. 0:14I'm not a financial expert and just a
9. 0:16mom in her 30s living in the UK who's
10. 0:18just trying to make sense [music] of her
11. 0:20finances. Going from being a major
12. 0:22shopaholic and in that to being more of
13. 0:24a financially responsible grown-up.
14. 0:26These are some financial decisions we've
15. 0:28made along the years that I think have
16. 0:30helped us become more and more
17. 0:32financially comfortable. So, see if any
18. 0:34of these are helpful to you, too. CLA or
19. 0:37payment plans are not your friend. When
20. 0:39you go shopping online nowadays, there
21. 0:41are so many things you can buy with CLA
22. 0:43or other payment plans. And technically,
23. 0:45there's nothing wrong with that, you
24. 0:47know, spreading out the cost, but I
25. 0:49found that it can be such a trap. It can
26. 0:52really get us to buy more than we can
27. 0:53actually afford. And in time, this is
28. 0:55something that's not going to have a
29. 0:57positive impact on our life. It can be
30. 0:59so easy to accumulate all of these
31. 1:01little credits that we don't even
32. 1:03realize if we buy so many little things
33. 1:06on [music] these payment plans. And I
34. 1:08think for me, especially if I go on
35. 1:09websites like ASOS and, you know,
36. 1:11clothing stores, if I can't afford to
37. 1:13buy that piece of clothing right now
38. 1:15today with the money I already have
39. 1:16saved up in my account, then I can't
40. 1:18afford to buy it and maybe I can look
41. 1:20for something else or maybe I can just
42. 1:22skip this purchase because
43. 1:24realistically, a lot of the purchases
44. 1:26that I used to make at least they were
45. 1:28[music] not necessary or they were
46. 1:30things I convinced myself I needed but I
47. 1:32didn't [music] really. Don't avoid
48. 1:34looking at your finances. This is
49. 1:36something that I think is so tempting
50. 1:37and I think especially when we start
51. 1:39getting in situations that are not great
52. 1:41when we start going into debt. I know in
53. 1:43the past when I used to have a month
54. 1:44where I was shopping a lot and just
55. 1:46buying aimless stuff, I would actually
56. 1:48avoid going on my bank account and
57. 1:49looking at my finances because I didn't
58. 1:51want to see it. I just didn't want to
59. 1:53know. And you know how they say
60. 1:54ignorance is bliss. Actually, it's not
61. 1:56when it comes to your finances because
62. 1:58all of those decisions that we make, all
63. 2:00of those purchases eventually will come
64. 2:02back to buy us. So, what I've learned is
65. 2:04that I just need to rip the band-aid.
66. 2:06Just open up with the account, look at
67. 2:07[music] the finances, make a plan. It
68. 2:09doesn't mean I'm never going to shop
69. 2:10again, but it means I'm going to be more
70. 2:12conscious. And also, it's going to make
71. 2:14me feel better about the shopping that I
72. 2:15do. I'm not going to have that guilt
73. 2:17because I spend aimlessly and I don't
74. 2:19even know what I spend. So for me,
75. 2:20making a list of the expenses, making
76. 2:22that nerdy spreadsheet, that has
77. 2:24actually been so helpful to see where
78. 2:26our money is going every month and how
79. 2:28can I maybe optimize, are there anything
80. 2:30on there [music] that we don't really
81. 2:32care that much, but we're just paying
82. 2:33for it because it's a subscription,
83. 2:35which happens a lot. And making that
84. 2:37list of expenses, looking at the bills,
85. 2:39looking at any debt you might have and
86. 2:41that we used to have. The only way to
87. 2:43make a change for the future is to
88. 2:44actually know what my situation is right
89. 2:46now. Credit cards are not free money. as
90. 2:49much as it feels like it because when
91. 2:51you do have a credit card, your balance
92. 2:53looks like a plus, right? That there's
93. 2:55money added into your account that you
94. 2:57can then spend. But if we spend more
95. 3:00than we actually earn each month, it can
96. 3:02get us into a not very ideal situation.
97. 3:05And the more these credit cards
98. 3:06accumulate, the harder it is to pay it
99. 3:08off. When we used to have that and we
100. 3:10had a loan, we started paying off the
101. 3:12one that had the highest interest, even
102. 3:14though the sum was maybe lower. And so
103. 3:16we got to pay that off first and then we
104. 3:18moved on to the next bit of debt that
105. 3:21that we had. And I think credit cards
106. 3:22might be slightly different in Europe
107. 3:24versus USA. But for us, we're living in
108. 3:27the UK and to be honest, I don't find
109. 3:29them necessary. And yes, there might be
110. 3:31perks that you get with credit cards.
111. 3:33But unless you are very very disciplined
112. 3:36and very conscious and you know paying
113. 3:38it off every month straight away and
114. 3:40making sure you don't go into any sort
115. 3:42of overdraft, then obviously credit
116. 3:44cards can be fine. And I know for
117. 3:45myself, I'm much more comfortable, you
118. 3:47know, spending the money that I actually
119. 3:48have in my account versus money I don't
120. 3:51already have in there. People who look
121. 3:54rich aren't [music] always doing well.
122. 3:56And I think especially nowadays with
123. 3:58social media, we go scrolling online and
124. 4:00we see so many different lifestyles that
125. 4:02are different to us. And we think
126. 4:04because we see influencers with a ton of
127. 4:06shopping hauls, with massive houses,
128. 4:08with, you know, a brand new cars and all
129. 4:11of these things, the latest iPhone that
130. 4:12they bought. Nothing wrong in particular
131. 4:14with any of those things, but [music] it
132. 4:16doesn't mean those people are doing
133. 4:17better than you are. Because sometimes
134. 4:19what you might not see behind the scenes
135. 4:21is that if they are influencers, for
136. 4:23example, they might just get gifted
137. 4:24those items. They didn't actually buy
138. 4:25them. And so for us going on a credit
139. 4:27card to buy those items, it's just not a
140. 4:30good idea. Or maybe they bought that
141. 4:32car, but it's actually just a loan. So
142. 4:33now they have huge monthly payments for
143. 4:35the next four years. Or maybe they went
144. 4:37on tons of holidays this year, but
145. 4:39[music] actually a lot of them were paid
146. 4:40with credit cards. And I think what it
147. 4:42boils down to is [music] just to not
148. 4:44compare ourselves to other people. And
149. 4:46just because it looks like they're doing
150. 4:47well, it doesn't mean they actually are.
151. 4:49And what I found useful for myself is to
152. 4:51just remember that I don't have to do
153. 4:53any of those things. I don't have to buy
154. 4:55designer bags or flashy cars or a whole
155. 4:57new wardrobe every season. I just need
156. 4:59to focus on what my goals are in life.
157. 5:01Like for example, I want to pay off my
158. 5:03mortgage early. I want to be able to
159. 5:05travel a bit with my family, but not
160. 5:06necessarily splurge every year on
161. 5:08travel. So I think when I focus more on
162. 5:09my journey and my goals that I have for
163. 5:11my life and my family, it really helps
164. 5:13me take a step back from all the
165. 5:15comparison. It [music] took me a while
166. 5:17to realize the difference between
167. 5:18appreciating and depreciating assets.
168. 5:21For example, a house and a car. When you
169. 5:23buy a house, it's actually an
170. 5:24appreciating asset. So in time, it's
171. 5:26very likely that the house value will
172. 5:28grow. It might be more or less, but it's
173. 5:30unlikely that it will drop a ton.
174. 5:33Whereas when you buy a car, it's almost
175. 5:35for sure that in five years that car's
176. 5:38value is going to depreciate a lot. So
177. 5:40one's more of an asset and one's more of
178. 5:42a liability. So for us, we have decided
179. 5:44to not have any monthly car payments
180. 5:47because it's something that is not going
181. 5:49to add that much more value to our life
182. 5:51having a new car on our doorstep. And
183. 5:53instead of paying those monthly car
184. 5:55payments, we would rather use that money
185. 5:56to perhaps pay off our mortgage early or
186. 5:59travel or do other stuff in our life.
187. 6:01And when we did buy our car, we actually
188. 6:04just saved up the money and bought it.
189. 6:06It wasn't brand new. It was secondhand
190. 6:08from someone else. And it was a few
191. 6:10years old, so it wasn't a super old car.
192. 6:13And I'm hoping it's going to be a
193. 6:14reliable car for a while. And we don't
194. 6:17have any plans of changing it unless
195. 6:19anything goes wrong with it. But that's
196. 6:21just what we have decided to do in terms
197. 6:23of the car. Shopping aimlessly doesn't
198. 6:26make life better. Now, when I started to
199. 6:28make money in my 20s, when I got my
200. 6:30first real [music] job, I was so excited
201. 6:32to shop. My kind of thought process was,
202. 6:35well, I have this money in my bank
203. 6:36account. I can just buy the item if I
204. 6:38really like it. And in the long run,
205. 6:40that wasn't very helpful because I ended
206. 6:42up with a wardrobe stuffed with clothes
207. 6:44that for one, I didn't actually wear
208. 6:46that much, and for two, it was such a
209. 6:48waste of money that I could have used in
210. 6:50a different way in my life. And to be
211. 6:52honest, I think I got lucky because way
212. 6:55back then in my 20ies when we were kind
213. 6:57of growing up in Romania, it's not like
214. 6:58credit cards and loans didn't exist back
215. 7:01then, but I don't think they were such a
216. 7:02big thing. They weren't to me at least.
217. 7:04They weren't like advertised as much.
218. 7:06So, it used to be harder, but I think if
219. 7:08I had gotten a lot of credit cards back
220. 7:10then, I probably would have been in a
221. 7:12much worse situation in my 20ies. So, it
222. 7:14used to be so much harder to get a
223. 7:16credit or to get a loan. But nowadays, I
224. 7:18feel like they're constantly bombarded
225. 7:19at us. like whether it's on social
226. 7:21media, buy through CLA or even sometimes
227. 7:24on my bank account app, I will get a
228. 7:26notification that says you are
229. 7:27pre-qualified to get this amount of
230. 7:29loan. And it's usually something crazy
231. 7:31like £17,000 or something like that. And
232. 7:34I think it can feel really tempting to
233. 7:35take that and to see that as free money.
234. 7:38But in the long run, we will end up, you
235. 7:40know, paying way more than we have to.
236. 7:42And it can really lead us to making a
237. 7:44lot of purchases that otherwise we
238. 7:46wouldn't have made. And it's just a path
239. 7:48that I don't want to go on. and I want
240. 7:50to just use the money that I already
241. 7:52have. In case you couldn't tell, I think
242. 7:53I'm quite a risk averse person. Shopping
243. 7:55is not a hobby and it's not retail
244. 7:58therapy. This is what I used to tell
245. 8:00myself. And also, this is what I used to
246. 8:02do all the time. You know, a lot of the
247. 8:04weekends before we had kids, we would go
248. 8:06out on shopping sprees. We would go out
249. 8:08to the mall and buy things. And I didn't
250. 8:10even have anything specific in mind. You
251. 8:11know how you go in the shop and you wait
252. 8:13for the shop to inspire [music] you. And
253. 8:14I find that that led me to a lot of
254. 8:16purchases that didn't really add that
255. 8:18much to my life and buying a lot of
256. 8:20clothes and shoes and accessories that I
257. 8:22didn't truly need and I didn't end up
258. 8:24wearing that much afterwards. So, they
259. 8:26were a complete waste of money. And I
260. 8:28think when we use shopping as retail
261. 8:30therapy and we think it's going to make
262. 8:32us feel better about, you know, certain
263. 8:34situations in our life and yes, shopping
264. 8:36will give you that dopamine hit, but it
265. 8:39will also give you an instant dopamine
266. 8:40drop after. And that is so quickly after
267. 8:43we make the purchase that by the time we
268. 8:45get home that dopamine is gone and we
269. 8:48might even feel worse than we did
270. 8:49before. [music] And the problem that we
271. 8:51have that you know was making us feel
272. 8:53like we need to go shopping is still
273. 8:55there. And even when I was going through
274. 8:58infertility or other hard situations, I
275. 9:00did resort to shopping a lot. And did it
276. 9:03make me feel better in in time? No. It
277. 9:05actually made my home a lot more
278. 9:07cluttered and it made me feel worse in
279. 9:08time. And so I've learned that I just
280. 9:10cannot use shopping as a way to deal
281. 9:13with my feelings. I have to find the
282. 9:14different ways to cope and focus on
283. 9:16other ways that I [music] actually
284. 9:18self-care, like, you know, taking care
285. 9:19of my body or going out in nature or,
286. 9:21you know, I know it sounds so silly, but
287. 9:23[music] it actually really helps a lot
288. 9:24more than just going for aimless
289. 9:26shopping. All the stuff in our homes
290. 9:28[music] used to be money. This is
291. 9:30something I heard a lot when I first
292. 9:32started on my minimalism journey and I
293. 9:34started decluttering and it was such an
294. 9:36eyeopening experience because I realized
295. 9:38I had wasted so much [music] money
296. 9:40buying all of these items that I didn't
297. 9:42truly need. And if I really thought
298. 9:44about it, a lot of them I, you know, I
299. 9:46could have used that money and saved it
300. 9:48up [music] for something else. I could
301. 9:49have used that money to, you know, add
302. 9:51to my mortgage or I could have used it
303. 9:52to pay for another holiday that year or,
304. 9:55you know, just in a different way than
305. 9:56[music] just the stuff in my home. Money
306. 9:58doesn't buy happiness in the way that we
307. 10:01think, like cars and luxury items and
308. 10:04things like that. Those things generally
309. 10:06don't tend to give us a lot more
310. 10:08happiness than we already have in our
311. 10:10lives. But I have found that money can
312. 10:12provide peace of mind. Not when we buy
313. 10:15all of those luxury items, but in things
314. 10:18like, you know, having that cushion to
315. 10:19fall back on if anything goes wrong in
316. 10:22our life, which things will eventually,
317. 10:24won't they? That's just life. So, when
318. 10:25we have those savings, when we have that
319. 10:27emergency fund, it can actually help us
320. 10:29feel a lot better mentally than buying a
321. 10:32new item ever could. I also learned that
322. 10:35I often feel like shopping when I'm
323. 10:37upset, when I'm bored, or when I have
324. 10:39something I'm struggling with in my
325. 10:40life. And I tend to go online and scroll
326. 10:43because it's a quick dopamine hit. It
327. 10:45makes us feel good in the moment. And it
328. 10:47does it make us feel good after?
329. 10:48Absolutely no. And some statistics say
330. 10:51that a lot of people tend to buy online
331. 10:53on their phone during the night. So in
332. 10:55the evenings once they come back from
333. 10:57work or they've put their kids down to
334. 10:59sleep. That's when we are tired. We're
335. 11:01sometimes upset from the day. We're in
336. 11:03that emotional state and that's what
337. 11:05leads to a lot of shopping that we
338. 11:07wouldn't do otherwise. So I really try
339. 11:09to catch myself when I want to buy
340. 11:11[music] something. I always try to give
341. 11:13myself a bit of a a cool down period. I
342. 11:15never buy anything on an impulse. I will
343. 11:17put it on my wish list. wait at least a
344. 11:20few days or wait at least until tomorrow
345. 11:22morning so that I can make sure the
346. 11:23purchase I'm making is something I
347. 11:25actually really want to buy and it's not
348. 11:27just an impulse on feeling. When we say
349. 11:30yes to buying something, we're saying no
350. 11:32to something else. So, if I'm saying yes
351. 11:34to buying a ton of new clothes this
352. 11:35month, then I'm saying no to saving that
353. 11:38money or to using it for a holiday for
354. 11:40the family or using it to pay off my
355. 11:42mortgage. And this kind of led me to ask
356. 11:44myself, you know, what is the most
357. 11:46important to me and making sure that the
358. 11:48purchases that I am making are aligned
359. 11:50with my values and my goals. Mortgage
360. 11:53versus rent, [music] which one is
361. 11:55better. For the longest time, we were
362. 11:57kind of debating and we've been renting
363. 11:58for a long time. And there's so much
364. 12:00debate whether one is better or the
365. 12:02other. And I've been listening to a lot
366. 12:04of finance like podcasts. So I was
367. 12:06listening to a podcast by Nisha on
368. 12:08finance and room Netflix show about
369. 12:11money and they all say how sometimes
370. 12:14renting is better and I do think it kind
371. 12:17of depends on everybody. So generally
372. 12:19what they say is that if you rent and
373. 12:21then invest the rest of the money like
374. 12:23for example a rent might be a lower pay
375. 12:25than a monthly mortgage would be. So if
376. 12:28you rent and then invest the rest of the
377. 12:30money for the future, then that might
378. 12:32actually in time give you more, [music]
379. 12:34you know, technically it will give you
380. 12:36more interest and it will add up to a
381. 12:38larger sum than having a mortgage and
382. 12:40having [music] a house that you own. But
383. 12:42that's only if you actually invest the
384. 12:44rest of the money that you don't pay on
385. 12:45a mortgage when you're renting. [music]
386. 12:47So that takes a lot of discipline and
387. 12:48that takes a lot of, you know,
388. 12:50self-restraint to make sure you put that
389. 12:52money into investments and not spend it
390. 12:54on random stuff we don't need. Whereas I
391. 12:56think for us why we decided to get a
392. 12:59mortgage is because well for one it's
393. 13:00the kind of payment that you have to
394. 13:02make anyway like you have to pay for
395. 13:04your housing unless you're lucky to
396. 13:06already own a house but you know whether
397. 13:07it's rent or mortgage you do have to pay
398. 13:09that monthly. Our kind of train of
399. 13:11thought is that when we have a mortgage
400. 13:14yes we are paying those monthly payments
401. 13:16but by the end that house belongs to you
402. 13:19whereas if you pay rent for 20 years
403. 13:21obviously [music] that house is never
404. 13:23going to be yours. And also what we have
405. 13:25found is that you just never know when
406. 13:27the landlord is going to kick you out.
407. 13:29And when we're looking at schools with
408. 13:30my kids, we wanted to make sure we're
409. 13:32close to a school that's a good one that
410. 13:34we want them to go to. Because here in
411. 13:36the UK, there's a catchment area. So you
412. 13:37have to be close to the school where you
413. 13:39want your kids to go. And there's the
414. 13:40security of having a house that's
415. 13:42actually yours. There's lots of things
416. 13:44you can do inside the house. You can do
417. 13:46whatever you want. Whereas when it's a
418. 13:47rent, [music] obviously you can't do
419. 13:49that. But we did rent for a long time
420. 13:51because we wanted to see first the area
421. 13:53and we wanted to live here for a while
422. 13:55before we actually bought a house here.
423. 13:58So I do think there's a place for
424. 13:59renting and for a mortgage. But I also
425. 14:02think a mortgage kind of forces you to
426. 14:04save for retirement or to save [music]
427. 14:06for the future because you know if
428. 14:08you're renting and you pay a bit less
429. 14:09then the rest of the money we might use
430. 14:11it in ways that are not going to really
431. 14:13help us in the future. Whereas with a
432. 14:15mortgage, it just pushes you to save
433. 14:17that money in paying those monthly
434. 14:19mortgage payments and it's a way of
435. 14:20saving for retirement [music] as well.
436. 14:22Having an emergency fund has always been
437. 14:24important to us and even more so in the
438. 14:27past few years. We've always made sure
439. 14:28we have an emergency fund of at least
440. 14:30about 6 months or so of [music] living
441. 14:33cost. So if anything happens, like my
442. 14:34husband did lose his job at one point a
443. 14:36few years ago. And so you know those
444. 14:39kinds of stressful situations are a bit
445. 14:41less stressful if you have that
446. 14:42emergency fund. if you know that okay
447. 14:44it's fine we can go on for 6 months if
448. 14:46we have to and that's always been really
449. 14:48important to us also it's been helpful
450. 14:50when things like last year it was before
451. 14:52Christmas our electric box like the fuse
452. 14:54box had some issues with it was melting
453. 14:57in one point and so they had to come and
454. 14:59replace the whole electrical thing it
455. 15:01was over £1,000 for that and yeah it's
456. 15:03those kinds of things that they're not
457. 15:05fun to pay for and it's obviously
458. 15:06annoying when it happens but [music]
459. 15:08when you have that emergency fund you
460. 15:10have those savings it's a bit less
461. 15:12stressful it feels like you're throwing
462. 15:13away that money in your savings, but
463. 15:15it's nice to have it there for this
464. 15:17specific reason. I've also learned that
465. 15:19decluttering makes you spend [music]
466. 15:20less, or at least in my case. And I
467. 15:22found with a lot of people who I talked
468. 15:24to, once you declutter and you see all
469. 15:26of those items that you're taking out of
470. 15:28your house that again, it used to be
471. 15:30money. And also, it's so much stuff that
472. 15:33you didn't truly need. I do think
473. 15:34decluttering is such a like cleansing
474. 15:36process and it really brings us more
475. 15:38clarity in what's important to us. And I
476. 15:41find now when I go to the shops, like I
477. 15:43decluttered some decor items from last
478. 15:45year that I wasn't using, I gave them
479. 15:47away to some of my neighbors, I donated
480. 15:49some of them. And now when I go to the
481. 15:51shop and I see something similar, I'm
482. 15:53not going to be tempted to buy it again
483. 15:55because I just know it's not going to be
484. 15:56a good purchase. I'm not going to enjoy
485. 15:58it. It doesn't bring value to my life,
486. 15:59it might be cute in the shop, but I
487. 16:01don't actually need it. So decluttering
488. 16:03has made me spend way less money than I
489. 16:05used to. We also started investing. This
490. 16:08is something I feel like with all of
491. 16:09this financial stuff, it's nothing we
492. 16:11are taught in school, is it? At least
493. 16:13not when we grew up. I'm not sure about
494. 16:15nowadays, but we didn't learn anything
495. 16:17about investing or even interest rates
496. 16:20or taxes. We didn't learn any of that.
497. 16:22And then you're plopped into the
498. 16:24workforce and expected to know all of
499. 16:25these things. So, it took us a while to
500. 16:27kind of learn what is investing and how
501. 16:29is a safe way to invest and all of those
502. 16:32things. But what we have learned is that
503. 16:33it's important to start investing and to
504. 16:35start small even if we don't have like
505. 16:37thousands of pounds to throw at
506. 16:38investments. Just start small every
507. 16:40single month and in time that compounds
508. 16:43because the interest will compound every
509. 16:45single year and it will be you know a
510. 16:47bigger sum every year. Those are some
511. 16:49money lessons I've learned so far in my
512. 16:5130s. If you have any money lessons
513. 16:52you've learned and you found really
514. 16:54helpful, let me know in the comments. I
515. 16:55would love to hear from you and maybe we
516. 16:57can make this a space where we can learn
517. 16:59from each other about money cuz again
518. 17:01we're not taught any of this in school.
519. 17:02I hope this was helpful and I'll see you
520. 17:04in my next