I’ve been thinking about money a lot, trying to figure out how to earn more, how to spend less, but mostly I’ve been trying to figure out how to be a better money manager.

Growing up, my family always had enough money for things that I needed and my parents are very generous. Unfortunately, since my parents were always there to “bail” me out, (not that kind of bail, more like credit card debt) I didn’t have to learn how to spend my money wisely.

What I do know is the earlier you smarten up about money, the better. My sister Brooke, an attorney, is currently working toward a certificate in Personal Financial Planning at UC Berkeley.

Here are the 7 lessons I learned from Brooke about money:

Lesson #1: This s*** is hard!

My sister is no dummy. She was Valedictorian of her law school class and she can school anyone on the subject of politics, but even she struggled to understand this s***!

Brooke got interested in personal finance because, “I was searching for help with my own finances. I kept making mistakes and realized how much I didn’t understand about personal finance. Most people are not taught about it in school or at home.”

When you’re young, it’s hard to look beyond the here and now when it comes to finances. “In my 20’s I didn’t think much about money,” Brooke told me. “I was focused on going to college and law school and as long as I had what I needed to get by, I was happy. I was not prepared for what was to come.”

Lesson #2: You have a relationship with money

When we think about money it makes us feel a certain way. You’re probably experiencing some pretty strong feelings right now as you read this article and that’s OK.

Take some time and ask yourself:

  • How do I feel when I spend money?
  • How do I feel when I save money?
  • How do I feel when I make a credit card or student loan payment?

Your answers will start to reveal some of your hidden or unconscious beliefs about money.

Lesson #3: Time is money

You know the saying “time is money,” well right now time is your most valuable asset because of two words: compound interest.

Brooke explained, “The power of compound interest is astounding. If you did nothing more than save $100 a month from age 20 to 65, assuming an average return of 8%, you will have $536,000 at age 65.  If you delay saving until you are 30, under the same scenario you will only have $233,000 at age 65.”

I know that we’re not supposed to live our lives with regrets, but I wish I had been smarter with my money when I was in my 20s because you have something I don’t have anymore – time.

Lesson #4: Credit cards are like a drug, so just say “no”

You know this lesson. It is in every single “what not to do with your money” blog out there. Brooke compares credit card use to addiction:

“I got my first credit card as soon as I got to college.  I was only 17, not old enough to sign a contract let alone manage a credit card.  I have gotten in to trouble with credit cards more than a few times. It took me until I was 40 something to break this habit and it is still a struggle to stay ‘clean.’”

Everyone warns you not to drink or do drugs when you go to college, but no one tells you to say “no” to those credit card companies that set up shop on every college campus.

Brooke advises young adults not to “fall into the habit of using credit cards. It’s very hard for young adults to imagine their future selves, but to manage your money well it is essential to do this.”

“If you have debt you need to make a written plan to get out as soon as possible,” warns Brooke, “This is hard. It requires making a budget every month and actually sticking to it, but your future self will thank you.”

Lesson #5: Just start saving for retirement already!

When you’re young and just trying to pay your bills each month, retirement feels like your last priority, but according to Brooke it should be your first.

Brooke advises, “Start saving for retirement as soon as you start working, even if you have debt, try to save $100 a month in an IRA or your employer’s plan.  If you don’t have debt or as soon as you pay off your debt then save more, remember compound interest.”

That’s why compound interest is an important lesson to learn. So even if you can only save $20 or $30 a month, that’s fine.

Lesson #6: You have to address your student loan debt

This one really surprised me because I always looked at student loans as “good debt.” While it’s a better investment than a shirt from H&M, it’s still debt.

Brooke says:

“Student loan debt is often the largest debt people have. It is overwhelming and (most people) just make the minimum payments. You should treat this debt the same way you treat paying off a credit card; you do not want to have this debt hanging over your head for the next 25 years.”

Nothing like an attorney to sober you up! But she’s absolutely right, you don’t want this debt hanging over you for the rest of your life.

Lesson #7: When in doubt save, save, save

Once you’ve paid down your debt, what should you be doing? Brooke advises, “take the money you were using to pay off debt and build an emergency fund of at least 3 months of living expenses in case you lose a job, change jobs, want to move, etc.

I know, I know…probably not what you want to hear but I want you to think about being in a job you absolutely hate but you have to stay because of the paycheck. Having some savings, having no debt, no school loans, allows you the freedom to make a big job transition or quit a job that’s intolerable or toxic.

You don’t have to follow all this advice but I urge you to pick one thing you’re going to do differently with your money.

I’ll leave the final words from Brooke, “I know this all sounds awful and tedious, but if you can develop financial skills and discipline at a young age, you can do anything.”

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