I love Penelope Trunk’s blog as her writing is consistently interesting and witty. I read today’s post, offering some broad life advice for 20-somethings, while I waiting for a breakfast meeting and jotted down some thoughts of my own on the napkin. Of course, looking back from the late 40s, it’s easier to tell the kids what to do than, perhaps, to listen to my father’s recommendation from the perspective of being 86!
- Save. Contribute every year to your 401k or IRA. If you are fortunate enough to have a company match, do at least that amount but really, take a little off of every paycheck. You won’t notice it at the time but you will really appreciate it when you are older. I know you have student loans and other things to pay off but this matters.
- Budget. At this point, it’s important to think about stashing some money into savings. Dream big about what you want from life and realize what it will take to get there. A simple start is to just write down what you spend, every day, for at least a month. Information is power.
- Watch your credit rating. The catchy commercials aside, it really does matter what your rating is. I was denied a credit card once, despite a 7-figure income, because I was chronically late about paying bills (by a day!) Never mind that I didn’t have a mortgage or carry a monthly balance on my credit cards. When you need credit, it’s too late to try to clean up your rating.
- Buy term life insurance. Okay, I HATE INSURANCE. Why I hate it is really too long for this post but basically most insurance products are just a license to steal your money. Term insurance, however, is different, cheap and if you think you will have kids or a partner later on, having some insurance in place is nice. Too often your health changes and you can become un-insurable; at a minimum, the cost of life insurance will get more expensive as you get older.
- Get a Will in place. While the likelihood of dying is low, if you die without a will, the state laws of intestacy will control. That means, if you are single, it all goes to your parents. If you have a spouse, half goes to the spouse, and half to your parents (or their parents, which might be worse). Likewise a health care proxy is critical to have so its clear who gets to pull your plug, what happens to your organs, what measures are taken to prolong your life, etc.
- Maintain Health Care. Regardless of the pros or cons of Obama-care, if you maintain continuous coverage, you cannot be denied treatment for pre-existing conditions. That broken wrist from skateboarding? If it develops carpal tunnel when you get a desk job (or just from your constant texting), you will be happy you have health care. Plus, having coverage is now the law…
If you are in your 30s or 40s, then
- Understand Divorce. Most marriages end in divorce. Understand the implications to you of commingling your financial accounts, having combined credit scores and know your rights. Work on your marriage too, but know what might happen if your spouse decides to walk away.
- Resist Decorating. Yes, it’s nice to have a beautiful home. Yes, your friends have gorgeous dining room sets and really cool dishes. No, they don’t have a 401k. Resist the desire to buy furniture for temporary residences like apartments, and try to DIY for as long as you can. You will have a time when you have too much furniture (like when your parents downsize and you inherit it all anyway).
- Go Back to Work ASAP. I wish I had stayed home with my kids but I did not. Now they are leaving for college and I am regretting missed opportunities. At the same time, their classmates’ mothers are struggling to figure out what to do next with outdated skills and no direction. I was fortunate enough to have my husband stay home with our children, which cost us lost income but gave us a parent at home. It was part of our decision on having a family. While moving from designing part of a particle accelerator to running a Brownie troop was a huge change for Tony, returning to work 12 years later was even harder. You get rusty. Technology moves on. It takes longer to learn things. Keeping a job, even part time, or virtually, will ensure you have something on your resume and make that re-entry much easier.
- Be realistic about your job. If you are working, be aware of the limitations of your job. I have seen too many people get into debt, or a lifestyle, because they think their job, or pay scale, will continue (anyone want some Lehman Brothers paraphernalia?) Others don’t think about their next job until they are looking for one. Hard work pays off, usually, but always plan your exit strategies.
- Dream Big. If you start your planning now – for retirement, for life choices, for even your next decade, you will be more likely to have a chance of getting there, even though your career will vary widely. The women (and men) with the most balance in their lives started structuring their careers to achieve this balance often decades before they were able to move into their dream job. Having a sense of your budget needs, and having six to twelve months of expenses in the bank can lower the stress levels tremendously if you have to stop working, lose your job or choose to pursue a new career.
- Buy Long Term Care Insurance. Its expensive to grow old. You may say you will end your life before you become dependent but you may not have that choice if you end up in a dementia unit or confined to a wheelchair. While most policies will not cover your costs, it will help defray some of the daily expenses of caregivers.
- Stay active. Put your bed on the floor so you have to get up every day – most of the damage from a fall comes from being unable to get up and having to lie there until you get assistance. Even small changes in your physical activity can have tremendous impact on your health when you get into your later years.
- Stay Sharp. Read. Explore. Learn. Make Friends. Travel. Lifelong learning keeps dementia at bay and its so hard to keep up with the demands of kids, job, house that you will not sign up for that night class in pottery or even a MOOC on Greek Mythology. Anything helps. Plus it gives you something interesting to talk about besides work. If you have children, realize that you will have the best ability to make friends with other parents when they are in nursery or elementary school. Its wonderful to have people who watched your kids grow up — and their perspective can be invaluable when you are considering disowning said children.
- Write it down. In a time of ephemeral emails, photos in the “cloud” and online Facebook pages for babies, it’s still important to actually write things down. Take time to journal. Write physical letters. At the same time, save scraps of things from your daily lives to trigger memories of what you saw or did. While I come from a family of hoarders, the upside of this is we unearth some very cool things when we clean out closets, most recently the stash of World War One letters, photos and scrapbooks (and field artillery maps from battles) that my grandfather started keeping in 1917. At the same time, the typewriter and floppy disks I used in the early 80s (carbon paper anyone?) are a source of fascination to my kids. The whole “Scrapbooking” fad is a bit excessive. Just toss things in a box. It’s more fun to sort through it later on.
- Savor Life. If there is one thing I see from my parents, it’s that the last years are not always easy ones. If you build a rich life, with memories, and risk, and fun and laughter, you will most certainly have regrets. But you will also have much to remind you that each day contains something that is sweet and joyful.
My list could go on, but I am still feeling my way into my 50s (not there yet!) I do feel that I should know more by this point in my life. Penelope’s point about building a career that enables you to work from home is tremendous. You may never want to work from home, you may never have to, but it’s wonderful to have the ability to do so when life throws you a curve ball.
Oh, and I wish I had done more situps in my 30s when it was easier to keep weight off …