The 7 Biggest Money Mistakes I Made in My Twenties

Correcting these financial mistakes will do wonders for your financial situation.

Like just about everyone, I made my fair share of financial mistakes in my twenties. And of course most of them seem so obvious now that I wonder what my young self was thinking.

The mistakes I made are things that a lot of people do wrong. Fortunately, I was able to resolve them and significantly improve my finances as a result. If you’re having similar issues, I’ve explained my biggest financial mistakes – and how I fixed them.

1. Do not record part of every paycheck

By far my costliest mistake was not making a habit of saving money. I wanted to save, but it was never a priority. I thought I would keep whatever I had left at the end of the month. As anyone who has tried this knows, it rarely works well.

As I got more serious about money, I adopted one of the most recommended financial habits – I started paying myself by sending money to my savings account. right after getting paid.

You don’t need a lot of disposable income for this. Even if you save $ 20 per month, it still adds up. Most importantly, it gets you into the habit of saving money.

2. Excessive spending with credit cards

I definitely got into bad habits with my credit cards when I was younger. I wasn’t using a budget so I would spend what I thought I could afford. I made purchases that were not covered by the money I had in my account because I thought I had it when my bill was due. And I carried balances, so I was charged credit card interest.

On the plus side, I never went crazy or nearly maxed out a credit card. Yet my overspending cost me money.

A few simple changes have helped me manage my credit cards better. I made a budget. I started to track expenses instead of guessing. And I’m committed to always paying my credit card bill in full, no matter what.

3. Waiting to invest and save for retirement

When people told me that it was important to start saving for retirement at a young age, I never paid much attention. I thought retirement was decades away and I would find a solution along the way.

But the benefit of starting your retirement savings early cannot be overstated. With compound interest, getting a few years ahead can save you tens of thousands of dollars more.

It was another habit that I had to develop. In addition to contributing to my savings every month, I also set up regular pension contributions.

4. Not having emergency funds

Maybe I’m weird to think of it this way, but an emergency fund has always seemed a little depressing to me. You save money, but not for something nice. You save for the possibility that something is wrong.

As I found out, it’s much more depressing do not to have an emergency fund when you need it. It was also a reason I was spending too much money on credit cards – I didn’t have a safety net for emergency spending.

Once I had had enough of that, I set up savings for emergencies only. I contributed regularly until I had six months of living expenses set aside. And I realized it wasn’t depressing at all. Quite the contrary, my emergency fund eliminates financial stress.

5. Do not plan for large expenses

My philosophy for large expenses was that I would solve them as I went. There was no planning ahead for things like tires for my car, vacation trips, or moving to a new apartment.

This led to a lot of unnecessary stress. Even during times when I needed to relax, like vacations, I worried about money.

The best way I have found to solve this problem is to set savings goals for all major future expenses. I save a specific amount per month for each goal. Opening a separate savings account for each of these goals also helped.

6. Using a substandard credit card for too long

I have had credit card debt in the past, but I have always managed my credit rating well. I pay on time and don’t use too much credit which helped me get good credit at a young age.

The problem was, I was waiting far too long to make the most of my good credit. Instead of looking for the best credit cards and picking one with high rewards, I just applied for a card from my bank. I spent years earning a mediocre 1% on every purchase when there were cards offering a lot more.

This was probably my biggest change. Today, I am passionate about credit cards. Before applying, I always compare credit cards to make sure I’m making the right choice.

7. Wasting time on unrealistic financial goals

Despite some bad financial habits, I was very keen to make more money in my twenties. But I looked for quick fixes rather than real solutions.

I looked for ways to double and triple my money. Basically I wanted a get-rich-quick scheme. Luckily, I didn’t waste money on silly ideas like these, but I wasted time.

Eventually I realized that I might not get results overnight by investing, but that I could at least start growing my wealth. I started putting money into a mutual fund through a brokerage account, and it’s my best investment yet.

There is no denying that I was bad with money. After a lot of learning and hard work, I am in a much better place. If you’re not completely happy with your financial situation, correcting your financial mistakes could give you the results you want.


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