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When I was in high school, I worked my first job as a babysitter for a handful of families who lived in my neighborhood. I did this for two years, almost every weekend, and I made $8 an hour. At the time, that money helped me save up for future college expenses, pay for my gas, and allowed me to have cash to spend when I went out with friends.
But as the years went by and I started taking other part-time jobs while in school — and full-time jobs when I graduated — that hourly rate doubled, then tripled. Even as I made more money, I tried to pretend that I was still living on an $8 an hour salary.
Here’s why I still approach my finances like I did as a teenager and the best money lessons that have followed me over the years because of that mindset.
1. It helps me stick to a budget
Back when I was making $8 an hour as a high-school babysitter, I tried to make sure that I was saving $2 to $3 of that hourly rate to fund last-minute purchases or things that I needed for school. Tricking myself into thinking I made less than I did helped me create a mini cash fund for the future, instead of spending every dollar I made, right when I made it.
Which is why, after spending most of my 20s racking up credit card debt and not having an emergency fund or retirement account, I wanted to make my 30s a decade where I fixed up my finances. To help do that, I went back to that teenage way of thinking, reminding me to spend less than I made.
Over the past two years, I’ve had the goal of trying to save at least 20% of my income. In order to make that happen, I stick to a strict budget that I create every single month. Rather than budgeting around my current income, I like to pretend that I’m making 30% to 40% less than I am. That way, I can always spend less money than I’m making to meet my savings and investment goals every month.
Any leftover cash helps pay off bills, goes into my emergency account, or gets deposited into my savings account until I have a game plan for how to use that money.
2. It makes me eager to have more sources of income
Early on in my babysitting career, I realized that working with just one family limited how much money I made, since they only needed me one night a week. To help bring in more cash, I started advertising my services to families who needed me on weeknights or on Friday nights. I picked up three additional families and was able to triple my weekly income.
When I started working a full-time job, I realized that while I didn’t have enough time to take on more jobs, I could start to find ways to make passive income so I could constantly be growing my net worth, without having to work around the clock.
I started making passive income through financial outlets, like putting my money in high-yield savings accounts, CDs, and even dividend generating stocks, to bring in a few thousand dollars extra every year.
I also created passive income yielding side-hustles, like selling online courses, products on Amazon, and even sharing affiliate links to products I like in my weekly newsletter, which earns me a percentage of each sale that’s made when someone clicks those links and buys something. These side hustles take up less than an hour of my week and can bring in thousands of dollars a year.
3. It forces me to pay attention to every dollar I spend
When I grew my babysitting business, I was making $150 to $200 a week, and working 20 to 24 hours a week, in addition to going to school. Every dollar I earned felt important because I had worked hard for it. I made sure that when I spent this cash, it was on purchases that I needed, and not just impulse buys during a casual afternoon mall trip.
Even today, as someone who wants to meet specific financial goals (retiring as a millionaire before the age of 50 and being able to save 20% of my income), I find myself sticking to the mindset of paying attention to where I spend every dollar.
On a weekly basis, I review each item on my credit card statement not only to look for any mistakes, but also to analyze everything I bought and whether or not I needed that item. I also update my budget spreadsheet weekly and make sure I do a financial inventory at the end of every month to keep on track of my goals.
Even though I’m making more than $8 an hour like I did as a teenager, paying close attention to where every dollar goes is my way of staying in control of my money — something I stopped doing in my 20s. However, in my 30s, when I’m earning the most money I ever have, I find it important to keep track of my spending and savings as if I were a teenager again.