Affiliate links to products on this page are from partners who compensate us and terms apply to the listed offers (see our advertiser disclosure with our partner list for more details). Anyway, our opinions are our own. See how we rate banking products to write unbiased product reviews.
- When I got serious about building wealth, I turned to experts and friends for advice.
- A successful friend told me to automate my finances, a strategy often recommended by experts.
- I didn’t, and managing my money manually has been a huge learning experience.
For the past six years, focusing on my personal finances has been one of my main goals.
I spent most of my 20s being reckless with my money and making countless mistakes, from ignoring my savings account to not having a retirement plan. It was after I was laid off from my full-time job in 2015 that I decided I wanted to make major changes to my financial portfolio and spend quality time strategizing what to do with my money.
I asked everyone I could for advice. I was so eager to learn and make better financial decisions that I not only reached out to professionals, but also to friends who seemed to have their money in smart places. However, some of the advice I received wasn’t the right advice to follow, and I’m glad I didn’t – especially advice that came from a friend of mine who was on a mission to become a millionaire by 40 – year old.
They were four years away and less than half a million dollars away from achieving that net worth. But when I was told that I should put my finances on autopilot and not manage any of them myself, I knew that was advice to ignore, especially since I had been so tight-lipped with my money for years. turn.
In the end, I was right. Here are three reasons I’m glad I didn’t listen to that costly advice.
1. Managing my money was a learning experience
When I first started managing my money, from my day-to-day finances to my investments, I knew I had to be hands-on in order to learn how it all worked. I decided not to find a financial advisor to help me allocate my money and instead read personal finance books and articles, did a deep dive into my finances and set my money goals. Doing this allowed me to educate myself on all the options available so I could make the best decisions for myself.
I also decided not to use any robo-advisors during those first few years so I could have complete control over the stocks or mutual funds I was investing in.
Relinquishing this control early on in my financial journey would have allowed me to skip the education phase that I felt I sorely needed.
2. Paying attention made it easy to catch mistakes
Another rule I made for myself that went against my friend’s advice was to do weekly money checks. I would take inventory of where I was spending my money and how my investments were performing. This was essential because it allowed me to catch errors on my credit card statements and adjust contributions to my retirement and emergency fund based on monthly income.
Because I’m a solopreneur and my income fluctuates every month, being committed to this process allowed me to make sure I was managing my finances in a way that made sense based on my current cash flow.
If I had just been doing direct deposits or automatic contributions, my variable income means my numbers would be off every month and I could have overdrawn several accounts, perhaps without realizing it.
3. I learned that finance is not for everyone
A big lesson I learned in my personal finance journey is that managing your money is not a one-size-fits-all process. It was important to me to have not only long-term financial goals (like a retirement plan and a savings fund for a possible mortgage), but also short-term goals (like paying for a wedding or a vacation).
With these goals in mind, I would then research different options and strategies that were low-risk to help increase my net worth and allow me to get closer to those goals—something I know I don’t. I would have been so proactive if I had listened to my friend and automated my finances.
This article was originally published in January 2022.