A letter to my 16-year old self: Money advice in your 20s

Dear 16-year old self,

You're about to embark on an utterly life-changing journey. You just graduated from high school a year earlier than your peers. You were raring to go and do medicine. You want to start the next step of your life as soon as possible. You want to grow up.

So I'm writing to you today to share with you three things about what I've learned about money and life in general. I hope in times when you feel pain, you will think of these words and know you are not alone.

1. Your parents have spent the best effort and money on your education.

The coming months will be important, you will decide on which university to go. You are going to be disappointed with a few rejections and missed opportunities. You will discover how options are limitless, and unfortunately, you will also learn for the first time how there are limits to the things your parents can pay for.

There will be times when you feel like your parents are not doing good enough, or like they are indifferent to your frustrations. But let me tell you;

dear darling, you're emphasising small faults over big wins.

Your parents have spent tens of thousands of dollars for your education when they decided to send you to the private school. They even sent you on a gap year stint in Jordan when you were 10. No small feat for a kid to go halfway through the globe to learn live and fend for herself with strangers, but even bigger feat for parents to sacrifice as much.

Now is the time for you to charge on your own. Believe me, the stars will always be on your side. You will not get the coveted scholarship to study overseas, nor will you get the full loan from the national education fund. Nevertheless, you will work hard like you always do, and after a couple of belt-tightening semesters, you will get the scholarship from a local university.

One day, your father will tell you, "It's true, we were never rich, but we are always comfortable", and you will realise how important such worldview is growing to become your own. Money is only important as far as it meets your needs.

2. Spend, but only on things that matter.

Getting the scholarship in your sophomore year will be grand, and I want to give you the permission to spend it. I tell you so because I know how you tend to get on board the guilt train, and feel like you don't deserve it.

Sweetie, the money is given to you because you prove how hard working you are. The money is given to you for your education. To learn, to explore, to discover, to do everything and to meet everyone new. So spend it, as much as you want. 

 Let me also tell you, handbags, shoes, or fanciful dress and tudungs, they will change with seasons. So too little trinkets of cute things or latest gadget. But you know what? It turns out I didn't need to tell because you already knew. How proud I am of you!

I still remember when you spent that first RM500 on books; your first Alexander McCall Smith and Eoin Colfer and Tony Parsons. How giddy you felt, how liberating. Like you were doing something naughty. When you blew hundreds when you drove over to Kuala Gula to volunteer during the International Wetlands Days, or when you maneuvered the houseboat on the Hawkesbury River. You felt guilty, but the experience was worth every penny, isn't it?

That's my dear, how good life should taste, and I want you to remember every time you spend your money. Money cannot buy you happiness, but it can help you get there, use it (correctly).  

Do I think you should have saved the money so I can use later? No, I don't. I'll be alright. Like I said earlier, the stars will always be on our side.

3. Know what you're worth.

As you venture out into the big, wild, world, you will start to recognise how your family is as ordinary and middle-class as anybody else. I'm not saying it because it's a bad thing, but because I would like to let you know how grateful I am for your ordinariness.

Knowing there are times when we can treat ourselves, like getting a visit to the bookstore, with a ration of 2-3 books each, and knowing there are times when things are difficult, like the time when we had to move and live in dad's office to reduce the family's spending - made you think about life, and made you think what life is really worth.

No stuffs, no things, and certainly no branded items can determine how worthy you really are - only what you have inside; your determination, your courage, your curiousity, and what you have in each other.

I cannot make you see it now, because you will have to go through some painful process to finally see it. But to help you go through it all, I can tell you, even though painful, they will always be beautiful.

One last thing, honey. You didn't become a doctor. It turns out it wasn't right for you.

I love you.

From yourself, 10 years later.

This post is part of Women's Money Week 2012. For more posts about Money in Your 20's see Money in Your 20's/30's/40's/50's/Retirement Roundup

Buy (and do) things which make you (truly) happy

I discovered Gretchen Rubin’s post where she writes about how “what you do every day matters more than what you do once in a while” when I was browsing through Psychology Today (which I read for fun). I was struck by how clearly the article spoke to me, and how simple and obvious things are usually the most profound.

Later, Get Rich Slowly featured an article which describes how people tend to spend on something they do rarely, instead of what they do everyday. We usually spend for our “pretend life“, a life we wish we could have (parading around with a Prada, or driving a car you couldn’t afford, for example?), instead of investing in real life.

What have the articles got to do anything? Everything, our happiness, and (of course), our finance. I believe they demonstrate the fundamental of financial wisdom, spend on things you do every day.

As we know it, personal values, emotions, and environment underlie our spending pattern, and although it sounds simple, the great introspection required to understand them maybe not so.