8 lessons people in their 70s wish they’d learned about money much earlier

If you’ve ever chatted with someone in their 70s about money, you know they have some regrets.

If they could turn back time, there are several financial lessons they wish they’d learned much earlier.

But life isn’t always as straightforward as we’d like.

Financial literacy is a complex beast, and it takes real dedication to gain a strong understanding of it.

Yet some people seem to have a leg up when it comes to managing their finances.

In this piece, we’re diving into the money lessons our elderly friends wish they had known in their younger years.

And who knows, maybe we can still learn a thing or two from them.

1) Savings are your best friend

Money can feel like a wild beast.

It flows in and out, often without a clear direction, and once it’s gone, it’s not easy to bring it back.

The best you can do is to learn how to tame it effectively.

For those in their 70s, one thing they’ve learned is that savings are a person’s best friend. They wish they’d realised this much earlier.

Think about it – savings are like a safety net.

They’re there to catch you when you fall, protect you during rainy days, and give you peace of mind knowing you have something to fall back on.

Unfortunately, many people don’t realise the importance of savings until later in life.

They spend their younger years living in the moment, only to regret not saving enough when they’re older.

If there’s one thing to take away from this, it’s that savings should never be overlooked.

It’s a straightforward but powerful lesson from those who have walked the path before us.

2) The power of compound interest

Have you ever heard of the term “compound interest”?

Well, let me tell you, it’s a game-changer.

Take it from me. When I was in my early 20s, I didn’t think much about retirement or investing.

I was living paycheck to paycheck, not putting much thought into my future. But then I met an older gentleman who gave me some sage advice.

He told me about compound interest – the concept that when you invest your money, not only does that money earn interest, but the interest also earns interest.

This can result in your wealth growing exponentially over time.

I was intrigued and started investing a small amount every month into a mutual fund.

Fast forward to now, and that small investment has grown significantly due to the magic of compound interest.

The people in their 70s would tell you they wish they’d grasped this concept earlier in life.

They’d tell you they wish they’d taken advantage of the time they had and the power of compound interest.

Trust me, it’s something worth learning about sooner rather than later.

3) The deceptive allure of credit

Credit cards and loans can seem like a dream come true when you’re in a pinch.

Instant access to money, whenever you need it – who wouldn’t want that?

But there’s a hidden danger behind this allure.

In 2019, the total household debt in Australia reached a staggering $139 billion.

A significant portion of this was made up of credit card debt and personal loans.

Many seniors wish they had understood the pitfalls of credit earlier in their lives.

It’s easy to fall into the trap of spending money you don’t have, and once you’re caught in the cycle of debt, it can be incredibly hard to escape.

While credit might seem like a quick fix, it often leads to long-term financial trouble. It’s a lesson many learn too late.

4) The importance of financial education

Knowledge is power – we’ve all heard that before. But when it comes to finances, it seems like many of us tend to forget this truth.

Many seniors look back and wish they had taken the time to educate themselves about money management, investing, and retirement planning early on.

They wish they had known about the different types of investments, the risks associated with each, and how to budget effectively.

The reality is, financial education isn’t usually taught in school. It’s something we have to seek out ourselves. But the payoff is well worth the effort.

Understanding how money works can help you make informed decisions, avoid common pitfalls, and ultimately lead a more secure and comfortable life.

Now, isn’t that a lesson worth learning?

5) Not all debt is bad

If you’re anything like me, you might have grown up with the idea that all debt is bad.

I used to think that the best thing to do was to avoid debt at all costs.

But as I’ve grown older and wiser, I’ve learned that not all debt is created equal.

There’s a big difference between high-interest credit card debt and a low-interest mortgage, for example.

Many people in their 70s wish they had understood this distinction earlier in life.

They’ve told me how they were so focused on avoiding debt that they missed out on opportunities to invest in their futures.

While it’s still important to avoid bad debt, don’t be afraid of good debt. It can be a powerful tool in your financial arsenal if used correctly.

6) The trap of lifestyle inflation

It’s natural to want to improve your standard of living as you earn more. New job?

Let’s upgrade the car. Pay raise? Maybe it’s time for that dream vacation or a bigger house.

However, many seniors have realized that this cycle of constantly upgrading can actually hinder your financial progress.

As your income increases, so do your expenses. This is known as lifestyle inflation. The danger here is that it can prevent you from saving and investing as much as you could be.

Next time you get a pay bump, consider putting a portion of it towards your savings or investments instead of spending it all.

It might not be the most glamorous choice, but your future self will thank you.

7) The value of financial independence

There’s something incredibly empowering about being financially independent.

Not having to rely on anyone else for your financial needs provides a sense of freedom that’s hard to describe.

Many people in their 70s have told me they wish they had strived for financial independence earlier in life.

They’ve seen how it can provide security, reduce stress, and open up opportunities.

Start working towards financial independence as early as possible. It’s not about being rich or having a high income.

It’s about managing your money in a way that allows you to live comfortably within your means and not be reliant on others.

A worthy goal, wouldn’t you agree?

8) It’s never too late to start

Perhaps the most important lesson that those in their 70s want to share is this: it’s never too late to start.

Maybe you’ve made some financial mistakes in the past, or perhaps you haven’t saved as much as you’d like by now.

That’s okay. Don’t let past missteps discourage you from taking control of your financial future.

Start where you are. Make a plan. Learn from your mistakes and the wisdom of those who have gone before you.

Because when it comes to your finances, there’s no time like the present to get started.

Final thoughts

Reflecting on these lessons, you might have noticed that financial wisdom doesn’t necessarily come with age.

It comes from experience, from making mistakes and learning from them.

These insights from people in their 70s aren’t just about money. They’re about life.

About recognising the value of planning ahead, of taking responsibility for your own financial future, and understanding that it’s never too late to start.

As the famous investor Warren Buffet once said, “Someone’s sitting in the shade today because someone planted a tree a long time ago.”

Plant your financial seeds today, nurture them with care and patience, and reap the rewards in the future.

Take these lessons to heart. Because when it comes to money, just like in life, it’s the lessons we learn along the way that truly shape us.