4 Things I Learned
About Money in 2024
I’ve been learning about Personal Finance since a Money Matters class my junior year of high school.
But 2024 was a year where my horizons expanded far more than previous years.
I read a wider variety of books and had conversations with many more people about their money.
This led to some changed perspectives.
And that’s normal.
We are not perpetually right.
Opinions change.
I’d argue that if you haven’t changed your opinion on anything in recent years, you are not learning enough about a topic or refusing to process what you are learning.
That or I’m just a flip-flopper on opinions...
Either way, below are 4 things I learned about money in 2024 that I would’ve ignored in 2023:
1. Your Head Knowledge Will Fail Without the Heart Knowledge
This one is painfully obvious in retrospect but took me a long time to realize.
If you knew the dictionary definitions of:
- Index funds
- Dollar-cost averaging
- Credit utilization
- Brokerage account
- 401(k) contribution limits
- High-yield savings accounts
- Itemized deductions
But have never thought about:
- Comparison
- Pride
- Status
- Envy
- Family Dynamics
You will not succeed with your money.
I used to think head knowledge was the way to financial success.
“If only people knew about compound interest and tax advantaged investing, then they would never have money problems.”
So, that’s what all of my first classes focused on.
I was wrong.
All the head knowledge in the world won’t stop the heart from saying “I want to feel accepted and one way to do that is living in this neighborhood and driving this car.”
Knowing we are emotional and irrational, we need to be ready to call out the flaws in our heart - like the fact that true acceptance comes from meaningful relationships, not checking superficial status boxes like cars, clothes, and homes.
My takeaway? Give people practical tips on the heart knowledge of money just as much as the head knowledge.
Head knowledge informs: “Experts recommend saving 10-20% of your gross income every year in a brokerage account.”
Heart knowledge executes: “A lack of financial stress will make me happier than buying nicer stuff. One way to avoid that stress is having a cushion of money for when life goes sideways. I’m going to start saving 10-20% of my income”
2. The Big 3 Are a Big Problem
Housing, Education, and Healthcare.
The cost of these three have increased far faster than average incomes.
This is leading to even the best budgets becoming squeezed.
I am of the firm belief that with sacrifice individuals can achieve their financial goals.
I am now also of the firm belief that compared to previous generations:
- It will be harder to buy a house
- Student Debt will have a bigger drag on our ability to save early
- Medical care (though now higher quality) will be a larger source of debt
It’s okay to acknowledge things have gotten harder at the macro level while still working hard to take care of your personal situation at the micro level.
3. Formal Education Does Not Equal Financial Education
In the past year I have met with:
- Undergraduate Students
- Graduate Students
- MBAs
- MDs
- PAs
- Consultants
- Medical Residents
- Investment Bankers
- Occupational Therapists
- Computer Software Engineers
Their common thread? A lack of knowledge about money.
Think of a career field where you think “surely THEY have learned how to manage money”.
They haven’t.
What does this mean?
It means you are not alone in feeling you need to be better with money.
Money remains a leading cause of stress for individuals and a leading cause of divorce for couples.
Yet somehow, money remains a topic people don’t want to discuss.
Talk about it. Learn about it.
It’s important.
4. You Won’t Earn Your Way Into Financial Security
If I earned more, then I would:
- Stick to a budget more consistently
- Use my retirement accounts
- Give more to my church
- Feel less stressed
- Be happier
The wide-variety of people I met with in 2024 earned a wide-variety of salaries.
Ironically, regardless of that salary, a few of them thought “just a bit more” would help.
I heard that from those making $40k.
I heard that from those making $250k.
At the risk of oversimplifying: To feel financially secure, spend less than you make and save/invest the difference.
That advice is true at $40k per year, $250k per year, and $2 Million per year.
You can overspend and get over your head at any income level.
Might be hard to imagine getting over your head earning $2 Million per year.
“That would be a whole other world of excess and extravagance.”
3.5 Billion people earn less than $10,000 USD per year.
They would likely make the same excess comments about your salary.
So what’s the takeaway?
It’s already the right time to start good financial habits.
You’re hurting yourself by waiting for your income to reach an arbitrary threshold.
To the New Year
Money is a continuous journey.
There’s a good chance I’ll have a similar list of lessons learned next year.
Looking forward to learning those lessons with each of you along the way.
See you in 2025!
