I’ll start out with the legal stuff and state that I am not a financial advisor, and whatever I write here is not financial advice. I’m just going to tell you what I’ve experienced over my career.
If I could start my career over again, the biggest thing I’d change would be to save (and invest) more money.
I’ve been through several economic crises, and it doesn’t look like the future is going to be any more stable. There hasn’t been a single time I’ve wished I saved less money, but there have been several times I wished I saved more money.
Besides providing security during crises, a good amount of savings gives you flexibility in your career. I’ve had bosses and clients that created an environment I didn’t want to work in. With money in the bank, it’s easier to walk away – even without a new job or project lined up.
Programmers generally get good salaries. But, like many people, it’s easy to have our expenses grow to match our income, so not much is left over at the end of the month. Just putting away five percent of your paycheck should lead to a life of financial security.
If you work for a company that matches your 401(k) contributions, that’s free money! A company match is like getting a raise of two to five percent.
When I was in my twenties, I wasn’t worried about “future Scott”. But now that I am “future Scott”, I have a bit of regret that I wasn’t as consistent with saving and investing as I could have been. That sports car I bought in my early twenties was fun. But a completely paid-off house in my forties would have been more comforting.
There may come a time when you want to get out of programming. As great as parts of it can be, there can also be a lot of stress and dissatisfaction. If you manage your money well enough to save and invest, you may be able to retire in your 40s or 50s.
I don’t suggest going to either extreme. I wouldn’t be happy living in a bad apartment, eating only rice and beans. Find a place in the middle that you’re comfortable with.
Nowadays, I generally work as an independent contractor. I have my own corporation and pay myself a salary from the company. If you want to be an independent contractor or consultant, I suggest speaking with a CPA beforehand.
There are significant benefits of working through my own corporation.
My company buys a new computer, using pretax dollars. I reimburse myself for my bedroom I use as my office. I created my own 401(k) plan, with a great company match. Paying myself through my own company has serious tax advantages.
However, there are negatives to having your own company.
There’s more paperwork to fill out, including government forms you may not be aware of. So, I pay an accountant to manage all this, and that costs a bit of money.