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"Dad, can you front me some money until I get paid? Sorry, I did it again…I saved too much."

Updated: Feb 27, 2021

Today's 'fit' in overall framework: Your Sherpa teams up with parents to help produce future-ready young adults. First, we create a sense of urgency over the NEED to save. Second, we motivate young people to WANT to save by demonstrating how money can grow. Third, we ensure young people stay in the POSITION to save by avoiding excessive college debt or being underemployed. And fourth, we teach HOW to save with an emphasis on the right mindset and method to succeed. Today's post fits into the 'HOW to save' part of my framework. Specifically, that choosing to 'save first' is one sure way to make it happen.

Back to today's Sherpa guidance…”Sorry, I did it again…I saved too much.” Believe it or not I said that to my dad more than once. Back in my 20s, before I had much responsibility in life (e.g., kids, wife, house, and Pomeranian), I would save so aggressively that sometimes the dust would settle, and I’d realize I didn’t have enough cash to pay a bill or two on time. My dad always helped. How mad could a parent really be for a kid saving too much. It's not like I blew it all on the lottery, nights out, or being overextended on a credit card.

How I got the 'compounding bug' (excitement about how money can grow) is a story for a future post. In hindsight, the absolute dollar amounts I saved back then were actually quite small since I was in my first job after school. But I was building strong habits early in life. The fact is, it is a lot easier to build good habits early in life than to change bad habits later in life.

Whether I knew it or not, I was doing things then that I now strongly recommend to young adults - ’save first’ and ’start young’. Saving first literally means ‘pay yourself first’ (setting money aside) before you live off what remains. I learned that mantra from THE classic book in personal finance ’The Richest Man in Babylon’. I’ll write a post about that book someday too but suffice it to say, “if you earn 10 coins, put one aside and live off the other 9”. It is actually more doable than you’d think. And starting young is the key to saving and building wealth because money can grow. Since money can grow, it makes the most sense to give it as much time as possible to compound and multiply.

Lastly, while this post illustrated something I did right as a young adult, I can assure you lots of my process is built around my mistakes and lessons learned. I just wish every young adult could learn from someone else’s mistakes.

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