I’ll let you in on a secret: I’m really about fifty-eight years old. Mentally, at least. In actuality I’m in my upper thirties. But if you look at my lifestyle, my spending choices, and my account balances, I’m much closer to someone who is nearing retirement. Financially I’ve always been about twenty years older than my real age.
I was always “older” than most of my peers. I was the kid who never rebelled, who always studied, never broke curfew, obeyed my parents, made responsible choices, and made more mature decisions than my classmates. Did this get me teased? Oh, you bet. I was a dork, a geek, a goody two-shoes, you name it. But I couldn’t help it. I was and still am incapable of being irresponsible. When I’m temped to blow something off or act like an idiot, something deep inside always stops me.
Why does this matter? It matters because when I was young and just starting out at eighteen, I was already thinking like someone in their late thirties. I was interested in investing, starting a retirement plan, saving up an emergency fund, and buying a house. I worked my way through school rather than take out loans because I knew it would be painful to pay it off later. I was actively looking for ways to cut my expenses and I already realized that, “stuff” was a pain to buy, maintain, and clean. I never saw the point in consuming like many of my peers in college. Spending on clothes, shoes, electronics, booze, and clubbing never seemed like an effective use of my money or time.
By the time I was in my late twenties, I had the portfolio of someone in their forties. I went through my twenties avoiding the debt traps that so many of my friends were falling into. I didn’t rent or buy beyond my means. I didn’t buy a $20,000 car on a $10,000 salary. I didn’t shop till I dropped or eat out every night. I didn’t bar hop or chase designer labels. I kept myself out of debt and amassed a nice nest egg and emergency fund. I bought a house. By the time I was twenty-eight I was at the point where I could really start to enjoy my money and travel and do other things without worrying about the financial consequences. Most of my peers were so far in debt that any “fun” money had to be borrowed.
Now that I’m in my late thirties I’m financially almost at the point where I can retire and live off some part time work. I never upgraded my starter home, I still have the car I bought at twenty-nine, and my life is not only debt free, but also clutter and hassle free, as well. Too many people my age are just now starting to sort out the mistakes from their youth. They’re just now paying off the last of their student loans. They’re realizing the house costs too much and that maybe they should have bought a used car. They’re just now starting to contribute to their retirement plans. They’re just now realizing that the credit card balances have become overwhelming. Because I never acted young financially, I don’t have a mess to clean up. I just keep moving forward.
Are people who never accrue debt always that much “older” than their peers? I can’t attest to everyone in the world, obviously, but the people I know who have never gotten into debt are all much like me. They were all much older than their peers, both financially and in terms of overall maturity. I don’t think it’s possible to live a debt free life if you are immature. Immaturity is a large part of what drives the “gotta have it now, gotta keep up with my friends” mentality. When you’re mature enough to realize that stuff doesn’t matter and that there’s no sense in trying to impress people you don’t know, you’re well on the way to a debt free life. Unfortunately, too many people don’t come to that realization until they are well into their thirties. And some never get there at all.
Can you teach someone to be old financially? To an extent, I think you can. You can model good financial behavior for your kids and teach them about money. You can teach them about both good and bad consequences for their actions. You can teach them about responsibility in general and you can teach them decision making skills. My parents were excellent teachers and models of responsibility. And, because I knew that there would always be severe consequences for acting like an idiot, I quickly learned how to act right. However, some portion of maturity may just be genetics. Some are blond, some are athletic, and some of us are just older than our peers. But the good news is that my financial old age means that my physical old age is going to much easier to deal with.