7 Ways to Save Money When You are Young and Naive
A lack of experience or knowledge shouldn’t stand in the way of smart money moves.
18 minute read
Naysayers are everywhere. When you’ve got a solid financial plan and stick to it, often friends and family will lose their minds and tell you that you’re doing it all wrong. It’s important to stick to your guns in these cases and follow the plan that you know will lead you toward debt freedom and financial independence. At the same time, some criticism may be constructive, so it’s important to be open so you can receive valuable advice.
We spoke with 28 financial experts and asked them a simple question: How were you criticized for managing your money, and what did you do to deal with it?
As a blogger who shares the ins and outs of his net worth every month, I certainly get criticized often, and I certainly take the pieces worth marinating on more, and then scrap the rest and move on. Everyone likes to share their opinions, but there’s only one person who gets to live our lives – and that’s us! You gotta do what’s best for you and your family, and ignore the rest.
When a friend of mine tried to convince me to spend more than I was comfortable with on an activity, he told me you only live once. I replied, “You’re right! And being poor by consistently making bad financial decisions is no way to live.”
More than anything, my wife and I have been criticized for our charitable giving. Several people in our lives have expressed concern that we give too much of our income to our church and missions organizations after we shared with them that we believe in tithing, i.e. giving back one-tenth of our income. A few of our readers even called us out and claimed this practice was unbiblical.
Though their intentions are good – most people who bring this up encourage us to invest more and spend money on things and experiences that make us happy – we have stuck to our guns. We look at it as an opportunity to tell others how giving has helped us manage our finances more effectively, and remain grateful for all we have. And we do make sure to have some fun with money from time to time, too!
I once got into an argument of sorts with a friend of a friend who didn’t understand why I would have a savings account, let alone more than one! We were discussing our expenses, and I shared that I put 50% of my income into savings for future needs, but I didn’t have anything absolute on my radar just yet. It was unfathomable to them that I might be saving money for no specific purpose.
We eventually agreed to disagree in the end, but I think they’re coming around now to understanding my point of view. They recently bought a home that’s been very expensive for the upkeep, and a savings account or rainy-day fund might have come in handy.
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I’ve been criticized for focusing too much on travel and experiences, as opposed to buying material assets like a house and a car. It’s easy to get sucked into that traditional cycle of growing up, buying a house and then a car. I managed by focusing on my “instagrammable” life – the amazing natural and man-made beauty that I was able to see around the planet. Staying true to myself is one of the best things I’ve ever done!
I think the biggest criticism I’ve had when managing my money is that I’m being “cheap” when I don’t want to do something someone else wants to do. In reality, I don’t mind spending money, as long as it is for something I value. However, others expect that I have the same values as them, which is not always the case.
Here’s an example. I’ve been accused of being cheap for not wanting to pay $20+ for each member of my family to go to a boat show to look at boats I’d never be interested in looking at, let alone purchasing. In these cases, I simply explain I’d rather save my money for something I’d enjoy and would bring value to me. I also suggest another activity we can do at an alternative time, so the person can still attend the boat show they want to go to, and we can still do something we both consider fun.
Just because I can afford to go to a boat show doesn’t mean it brings me joy. Sometimes people get it. Sometimes they don’t. Being mindful with your money isn’t being cheap.
Everybody has an opinion about what you should be doing with your money. I should know, since I’m a financial blogger, and I’m one of those people telling you what you should be doing with your money. How do you handle the criticism? If it’s constructive criticism because you’re making a mistake, then you should take action. When I realized I could save thousands of dollars if I refinanced my law school loans, I took action immediately. On the other hand, if the criticism is judgment about how you’re spending your money, you should ignore it. You’re the only person on the planet who can decide whether it’s better to spend your money on a great meal at a restaurant, a new TV or by building up your bank account. Just make sure you’re spending it on what actually makes you happy.
People, including my own family, criticized me when I started my own business and chose not to have a full-time job working for someone else for a full year. It ended up being the best financial decision I’ve ever made, and I’ve learned to follow your intuition when it comes to money. You’ll likely end up in the right place.
I have been criticized for recommending investing in your 20s and 30s over paying down low-interest mortgage debt. We have handled the criticism by understanding the math and power of compounding growth while you are young. We also knew that as we got older, there would be plenty of time to attack our low-interest mortgage debt in our late 40s and early 50s. You can equate how you pay down low-interest debt with the way you make your investment portfolio more conservative with bonds as you get older. While you are young, it is important to capture growth, but as you age, you cut risk by buying bonds and/or paying down low-interest debt.
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I really had to take a step back to think about this one, because I honestly can’t say other people have been critical about my money choices. But do you know that old expression “You are your worst critic”? I think that’s where my answer lies.
I’ve spent a lot of time beating myself up for poor money choices I’ve made in the past. No one else has technically criticized or blamed me. In fact, most people I know are perfectly content with having debt, and believe it to be “totally normal.”
When I discovered the online world of personal finance, I realized things could be different. My family and I didn’t have to live paycheck to paycheck. We could put a real focus on preparing for our future, including retirement. It didn’t have to be so hard just to get by.
That’s when I started my own, internal, tough love — which did include criticizing myself for the bad decisions I’ve made about money, and the backtracking that would be necessary to make corrective action. For me, it was more of a self-reflection and examination of what I wanted my future to look like. We took a long hard look at the mistakes made in the past, and how we could change things around to improve our financial lives.
When I was 23, I decided I wanted to pay off my student loans early. I hated being in debt and having that balance hover over me.
I started being really frugal, especially with food. I never went out to eat. My coworkers didn’t really understand this and at one point, my boss said, “Do you just never have any fun?”
I didn’t want to explain to him that eating lunch with people I spent 40 hours a week with wasn’t really my idea of fun, but I tried to let it slide. It hurt my feelings, though. I wanted him, and everyone else in my office, to understand why I didn’t eat out with them. It wasn’t because I didn’t like them or that I hated to have fun. But not eating out was an easy way to save money and reach my goals.
In the past, I’ve been criticized for purchasing frivolous things (i.e. gadgets, gizmos, tech toys, etc.) and shamed because I didn’t invest that money instead. The critics definitely had a point, because the money I was spending on “toys” could have grown substantially over time. But rather than beat myself up and worrying about the lost opportunity costs, I decided to make MORE money. By focusing on income, I was able to increase my savings/investing rate AND still purchase the toys I wanted.
Everyone will have an opinion when it comes to money. This is especially true when they find out you are managing or investing by yourself. I started my journey on self-educating and managing my finances back in 2014, and I’ve had a few people criticize what I was doing in the early days.
The early criticism was that I’d lose all my money or make mistakes because I was trying to learn. Instead, I should consult professionals. While seeking help isn’t necessarily a bad thing, it’s funny that a few went straight to the negatives. However, I did not let this get to me, because I value learning, trying things slowly, and if I make a mistake, that is a better learning experience when it comes to money and investing.
When these criticisms came my way, I would respond politely with a few points:
- I’d rather take control and be the one to guide my finances
- I want to understand how my money works, not hand it off to someone and have no clue why he or she recommends doing XYZ.
- Teaching yourself and being self-sufficient is an amazing experience.
- Mistakes are key to learning and to better oneself. Of course, I don’t want to have a detrimental money catastrophe.
I found being polite and responding with the above usually ended the conversation without any further discussion. But if it kept going, I would smile and nod, but internally ignore the conversation. It’s not easy, but if you’re passionate about learning and determined to succeed, the naysayers won’t bother you at all.
When you want to better yourself financially, there will always be friends, family, or colleagues who have something to say. Many times, they are just generally concerned and aren’t saying these things as bad intentions. But money can still be a taboo subject among others, so it’s best to tread lightly and stick to your plans.
Five years in and no one criticizes me anymore; instead, they all ask for help or try to figure out how I do it. (:
For the last 5+ years, I’ve worked from home, and my income is not a steady one. Every month is different, but I do fine. That seems to bother people. Most of them can’t understand that you can earn enough money for everything while working from home.
The other thing that people around me can’t understand is how I spend my money. I am not the one who will go shopping for clothes, shoes, make-up, new technology… I am willing to spend all my money on travel and new adventures.
“You only have two pair of jeans and you spend your money on travel.”
“You are going somewhere again?! You can buy a new phone with that money.”
Oh yes, I have heard those a lot! I don’t really care about a new phone or new pair of jeans, but we live in a materialistic world where most people do care about that.
The only thing you can do when people give you their opinion about how you should spend your money is to ignore them. As long as you’re happy, and as long as you have enough for your basic needs, spend your extra money any way you want!
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I have not often been criticized for managing my money, because my money is not an open topic with many people. But I do talk about money with my parents, and while they aren’t exactly critical, they have raised an eyebrow at my spending on certain expenses that they consider extravagant. For example, a housecleaner, a satellite radio subscription, or extra legroom on a plane. I would have to agree that these are all luxury items.
What I do to deal with the criticism is acknowledge that it is valid. If I am responsible with my money, I must be willing to really look at my budget and examine whether I can truly afford the expense. In lean years, the answer has to be no, and I must be able cut those costs when my budget needs tightening. In healthy years, I allow myself the treat.
I’m Becky Beach, a finance blogger, and I have a personal story to share with you. My husband is a big spender, so doesn’t like it that I save and live frugally. He would prefer to spend our savings on family trips and shopping for the latest gadgets.
He constantly criticizes me for being so frugal, like purchasing food from Aldi, buying clothes on clearance, spending hours trying to find the best deal, and coupon clipping.
I deal with it by compromising with him.
I say that because we live frugally, we can afford to spend money on a vacation each year, contribute to our retirement, my son’s college fund, and buy a gadget now and then. He has relented somewhat, but still criticizes my frugality from time to time. Especially when I buy cheap toilet paper!
Spending money without budgeting brought me a lot of criticism from friends and family. I was earning a decent income, but failure to keep track of my spending left me with little to no money for the most part. Keeping up with this soon got me into debt, and I dug myself deeper into it each day.
A turning point for me was learning how to budget for my expenditures. This took time to learn, but it all started with a simple personal finance class that I sat through. I must admit, at first it felt I was wasting my money to learn about how I should keep it. It’s been worth every coin, however.
Coming up with simple estimates of the cost of each item I wanted to buy helped me stop impulse buying, which was one of the main problems I had. With time, I familiarized myself with the prices of each item I was buying, and this contributed to spending more wisely.
Informing people around me that I was also trying to cut down on my spending also proved to be beneficial. I could see them make an effort to remind me to stay within my budget whenever we went out, or when I was about to spend more than had been budgeted for.
A check-off system to build up an emergency fund has come in handy as well. I can now spend and still have the confidence that ̶ should any financial emergency arise ̶ I can manage the situation.
I have always been somewhat of a personal finance geek and tracked my numbers very closely. I have been criticized before for being overly conservative with my money and always worrying about the future. While it’s a good thing to save and be prepared for emergencies and eventual retirement, I can go overboard at times. While overspending is obviously bad money management, having a scarcity mindset can also lead to negative consequences.
Since I am now aware of my tendencies, I try to make it a point to spend money where I find value (such as on experiences with my family or enjoying a meal out every once in awhile.) I also want to make sure I am giving a portion of my income away every year to my church and other charitable causes that I believe in. By focusing on spending my money on and giving to things I care about, it helps to bring balance to my financial management.
I had to learn that money is great as a tool, but when you let it control you (either by overspending or hoarding), it has a negative affect on your life. And as the saying goes, you can’t take it with you when you die!
I was first introduced to the personal finance community in my early 20s, and I had a huge mindset shift on how I viewed money. I then started my journey to financial freedom where I would spend my money carefully instead of spending wildly.
I still buy things I want, but most of my money either goes towards debt or income-producing assets. This way of living and managing my money caused friends and family members to look at me differently and even criticize my way of being.
I get called boring, cheap or old because I don’t have the same spending habits as most individuals in their 20s. I try to overcome these situations by teaching friends and family financial literacy and showing them the benefits of managing your money.
Sometimes I can convince some people of the benefits of personal finance, but others don’t believe in it and continue to criticize myself and others on our careful spending habits.
The sad fact is that most people don’t manage their money properly and are frivolous spenders, so if you are the person who manages your money carefully, you are essentially an outcast. You are seen as the person who doesn’t want to have fun, when in reality you are trying to build a better life for yourself instead of living paycheck to paycheck as most Americans do.
There will be many times where you will be criticized for managing your money, and you won’t be able to explain yourself to everyone. Sometimes you just need to turn a blind eye to these individuals and do your best to not let their view on life affect yours.
By managing your money and trying to build a better life for yourself, you know you are on the right path, so you just have to ignore the individuals criticizing you.
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When starting and running small businesses, I’ve been criticized for not spending enough on marketing and advertising in the early days. My critics have insisted this is an “investment” in the future of the business, but my approach has always been to grow using the profits of the business, and not take out debt for advertising.
I believe that it’s not until you reach a certain point that you really know how to spend marketing budgets wisely, and the other elements of the business are equally ready to provide a good result for the customer. I’ve stuck my ground and invested slowly, but as a result, every business I’ve started has grown at a healthy and sustainable rate.
How were you criticized for managing your money?
We have chosen to follow a FIRE mindset, and this has come with criticism from friends and family.
- They have questioned why we need to work so many hours to save so much, when it’s obvious to them that “we are fine.”
- We have been told that retiring early will never work out, because we’ll run out of money.
- They don’t understand what we will do with our time if we retire early.
- People question why we want to be debt free. They say that they’ll have their student loans forever, and that they believe it’s just a fact of life.
- We’ve been made fun of by friends our age for sticking so closely to our budget.
- We manage our traveling budget through travel hacking – the responsible churning of credit card rewards. We have been told that we spend too much money on travel because they don’t understand the methods. They also criticize that it will affect your credit score drastically (which it doesn’t) to open and close multiple credit lines.
What did you do to deal with it?
- We started a blog to inform others about the FIRE principles, explain our mindset and share our experiences. We hope that our content provides value to others and helps them start or motivate their journey.
- We focused on our short- and long-term goals. Short – pay off debt, establish a substantial emergency fund, and travel hack. Long – reach financial independence, retire early, choose how we spend our time. Without goals, it’s hard to work towards something because it isn’t defined and there’s nothing to celebrate!
- We remind ourselves of “our why” so that the external buzz doesn’t bother us.
- We use emergency fund and debt payoff printables to motivate us to keep moving forward.
- Sometimes, you just have to laugh it off and/or change the subject because people don’t want to see your point of view. We’ve come to the realization that it’s OK, as long as we’re happy with our decisions. Many times, they are criticizing you to hide their own insecurities, though!
My parents used to disapprove of my decision to spend a lot on business and investment seminars and coaching programs. They thought that it was unnecessary, and I could have had better use for that money. I know that I cannot change their mind with just my words and my reasoning. What I did was that I showed them the results that I have gotten from investing in myself and learning from others. That is proof enough to change their perception of my decision.
I’ve been finding ways to make my money grow through business or investments. I buy stocks and look for trends in IPO and more. My family thought I lose my money trading, but I’ve been able to fully pay off my home and more through my investments. I continued to make investments, and even tried forex (although it’s the most tedious).
I still invest a lot in stocks (currently bonds due to the impending market crash that is bound to happen). I did it as a hobby, and it’s been a great way for me to earn side income which has paid off my home, schooling and other expenses. I kept learning and trying things out, and eventually made it work. I sought to prove my family and friends wrong, and I did!
While my husband and I were working to become debt free, we were told by a lot of people how we should manage our money as a young married couple. I’ll never forget when a co-worker told me that we shouldn’t pay off debt, because we would no longer be able to claim the student loan interest on our taxes. I smiled politely, nodded my head, and thanked him for his feedback. I know he meant well, but our financial journey is ours, not his.
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I’ve been criticized for “building wealth” and investing, because people have told me how much need there is in the world. Of course, in the specific example I remember, the person didn’t realize how much I gave. I was able to show her how her debt was a problem, and that I gave substantially. I was also able to turn it into an opportunity to help her with her finances. In the end, she said, “Maybe I was just jealous and insecure of my own financial situation.” That’s why she criticized mine. Now she’s doing much better. I was able to explain myself, and then help her out of a financial disaster.
There have been many times we have been criticized for managing our money, but we let it roll off our shoulders, because we are meeting and exceeding our money goals.
The biggest criticism we faced was when we decided to pay off our student loan debt. Our interest rates were ridiculously low (under 2%), and everyone thought it was silly to pay them off, due to positive arbitrage, dropping that much cash, and because they thought it wasn’t possible. However, it was a cash flow issue for us. We wanted $500/month back in our pockets… a total of $6,000 a year. We wanted to not be saddled with debt. We wanted to be debt free and not stressed. So, we dealt with it by paying off $53K of debt in one year.
I was criticized for using my home equity line to fund my down payment for a rental property. Although this is a common strategy among real estate investors, when I told people we were planning on doing this, I received many comments of disapproval and doubt. Some said we were taking too much risk, as a default would mean we could lose our house. Others said borrowing money to make money is not responsible, as we’ll be further in debt.
We welcomed these comments and took them into consideration. Doing thorough due diligence on investments is important to us. We appreciated hearing the worst-case scenarios and different perspectives. We wanted to enter this deal comfortably with open eyes.
Ultimately, we ended up proceeding with the deal. It has been one of the best investments we’ve made. Having the rental income stream has helped tremendously, especially when our household income was greatly reduced during my recent maternity leave.
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It’s not really socially acceptable to be frugal, especially when you are making a decent salary. We live in a hedonistic culture where YOLO (you only live once) gets thrown around as justification for every irrational decision ever made. This is very different from most Asian cultures by the way, where saving is widely accepted as a virtue. (Consider China’s savings rate as a percentage of GDP of over 50%, vs the US rate of less than 20%).
Knowing that culturally I’m a mix of both Chinese and American culture has made me more comfortable in my own skin. And quite frankly, because the consequences of my savings really only affect me and my family at the end of the day, it’s easier for me to dismiss any naysayers. I’ve seen how my savings can pile up. And that discipline has become a habit.
Published by Debt.com, LLC