Financial Advice I’d Give My Younger Self

Sterling Nielsen President/CEO

When I was a child, my father worked as a probation officer and my mother dedicated herself to managing our bustling household of seven children. I credit my younger years with helping me gain a pivotal understanding of hard work, perseverance and money management.

I knew if I wanted something, I had to earn it, so I took on multiple paper routes and regularly held a job throughout my teens. My college education majoring in accounting helped me have a good financial understanding, but I still had lessons to learn.

Here are five lessons I would have told my younger self.

1. Plan your budget, but brace for surprises

   Before getting married, I meticulously crafted a budget, confident that living within our means would ensure financial stability. However, life had other plans. A few years after buying our home, my wife and I were reviewing our finances. To my dismay, I realized we wouldn't be able to cover our expenses the following year.

   With three children and only a 1% pay increase, we were on the brink of financial trouble. I decided I needed to find a better job with improved benefits.

   Lesson one: The best-laid plans need to account for life's unexpected twists and turns. Brace for the unexpected by setting a goal to have at least three months of expenses set aside.

   By the way, the new job I found turned out to be a solid decision—it was my first role with Mountain America in 1995.

2. Beware of impulse buys

   As our family began to grow, we decided it was time to purchase a minivan. Like many others on a shoestring budget, we opted for a used vehicle. We planned to stick to the base model to save, but when I saw the touring edition, I was captivated and chose the upgrades. This caused us to spend more than necessary and created some added financial strain and buyer’s remorse.

   Whether it's a flashy car or an enticing ad on social media, giving in to these purchases can lead to unnecessary expenses.

   Lesson two: Give yourself the gift of being disciplined.

3. Invest in your future sooner

   I was in my 30s before I started to set aside retirement savings. If I had started at the age of 25 instead of 35, it would have made a substantial impact.

   Look at how big the difference is if you start saving $5,000 annually at 25 versus 35:

   • Age 25 until 65: With an average annual return of 7% in a retirement account, savings can grow to approximately $1,068,048.
   • Age 35 until 65: The savings total would grow to approximately $505,365.
   
   

   That is a $560,000 difference simply by starting 10 years earlier!

   Lesson three: Start long-term savings sooner.

4. Use credit cards strategically

   There is a lot to know about using a credit card that I wish I had learned sooner. Once you master this essential tool, it can be a great resource to manage your personal finances. A credit card can:

   • Provide convenience and protect against unauthorized charges.
   • Help build credit when you make consistent, on-time payments—consider autopay to stay on track.
   • Offer rewards like cash back, gift cards and travel rebates.
   • Include perks such as purchase protection, extended warranties and rental car insurance.
   
   

   Lesson four: A credit card is a valuable financial resource if you pay it off every month to avoid interest charges.

5. Consult with a free financial guide

   My final, and maybe most important, piece of advice for my younger self is to consult with a financial expert.

   Even though I was an accountant, having a third party review my short- and long-term goals would have been invaluable to ensure I was on the right path. The only investment required is time, and the peace of mind you’ll gain is priceless.

   Lesson five: Establish a solid, personal financial plan.

I hope you can apply the lessons I've learned to your life. Don't forget, Mountain America is here to guide you forward. Thank you for being a valued member.

Sincerely,

Sterling Nielsen