3 Money Mistakes I Made In My 20s
When you are in your early twenties nobody expects you to be rich or financially sound. You can use that to your advantage and spend your precious money on acquiring skills and building wealth. Sadly most of us do not follow that path. During my twenties, I made a lot of mistakes with money. It wasn't that I didn't understand the concept; it's just that I didn't know how to deal with some of the responsibilities — like student loans and credit card debt — that go along with being an adult.
Saving Instead Of Investing
It’s hard to imagine that there was a time in my life when I didn’t know how to invest. It seems so obvious now. Investing is a long-term strategy; it takes time for your money to grow and mature into something that can provide financial security and stability in your life. That's a harsh reality! If you are lucky, then you might get rich overnight. But what's the point if you keep it in a savings bank account?
Starting early is key—the earlier you start investing, the more time you give yourself for compound interest to work its magic (and make no mistake: compound interest will work its magic).
I learned this lesson the hard way after saving 15% of my paycheck for the first five years of my job without investing any of it. In hindsight, this was a big mistake because even though I had saved lots of money by not spending any on anything besides necessities like food and rent, those savings were still sitting in the bank earning zero percent interest while inflation ate away at their value year after year.
Spending Money To Look Rich
This is a mistake that I made more than once. Especially after I quit my 9-5 job. It’s the idea that if you don’t have a certain brand, or wear certain clothes, or drive a certain car, then people will think you’re not successful. The truth? No one cares! They are thinking about the same petty things in their lives.
I remember when I was 21 years old and working as an intern at an IT firm in Hyderabad. Everyone around me seemed to have these fancy clothes and watches. They were always talking about how much their car cost or how much their engagement ring will cost but now it doesn't seem important at all! I didn't care how much money my friends made or what they did for work; what mattered most was who they were as people and whether we would be friends forever. So why did I spend so much time & money worrying about what other people thought of me? What a huge waste!
Taking Bad Debt
In your twenties, you’ll have to make some tough decisions about how you want to manage your money. One of the biggest ones is whether or not to take on debt.
When my wife and I were in our late twenties, we decided it would be fun for us to move into a nicer apartment together even though we were living on our parental property. We were both working full time and had decent salaries, but neither one of us had enough cash saved up for the kind of down payment we needed for a place like that. So we decided to take out a loan from the bank. And not just any loan but one with an interest rate of 8 percent! That’s right: 8 percent! 😂
At first, this was fine because it was only small amounts each month that we paid back while still having plenty left over at the end of each paycheck (we often lived paycheck-to-paycheck). But then something happened: We had a baby and suddenly there wasn't enough money going into our checking account anymore—and yet we still had all this debt coming due every month! Btw I love the baby and don't blame him for any of this. In fact he made me realize the fuck ups I was doing with my money.
Don't Repeat The Same Mistakes
Okay, so I did them but you don't have to. In your twenties, you should plan & act for the future:
Should start two funds - one for emergencies & another for investments. This way you will be able to create an enormous amount of wealth by acquiring more assets along with security measures in place. All in due time.
Take risks, but only when you know what you're doing and have a plan in place to help mitigate them i.e., don't gamble. You can always do that once you have enough money. Then take a small portion to play riskier bets.
Just remember, the decisions you make today are going to affect your financial future and set the stage for all of those adventures later on in life. Because of all those mistakes, I deprived myself of those adventures now. No problem. It's better late than never. I still have a lot of time to make up for it but you might be in a much worse situation if you delay any further. Get your shit together bro and safeguard your future.
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You said it all, better to get our shzt together now than later. These are good lessons anyone in their twenties especially early twenties should take note of to be in a better position before their 30s. We should know it's a marathon and not a race, even if we get rich overnight, it's just a boost to our position in the long term.
Thank you so much bro. I realized everything a bit late but at least it was not too late. For people in their 20s, it's the golden time to build and retire early.
Wise words!! 🙏
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Don't know if I should feel lucky with me being in my early twenties learning about my finances here on Leo. It's a good read and I'll always remember to be conscious and aware so as not to make these mistakes in every day life, it's now easier than ever to fall into financial traps these days.
Yes, mate. Consider yourself lucky. I wish I had such an awesome community to teach me back then. Now that we are here, sky is the only limit. ;)
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Wooooow!
The lessons here are invaluable. They are the mistakes people all over the world have made in their twenties in particular. I have really enjoyed the article. Many thanks for sharing.
Thank you so much buddy! Glad you enjoyed the article. 🙏
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I'm actually thinking about getting debt to buy a laptop that I will need on school. But I'm having second thoughts because of the risk.
That would be a good debt. It's an investment in yourself but if you are going tojust watch movies and play games then don't xD A device like that can be used to do some serious stuff. Like making a shit ton of money via internet. xD
All the best bro!
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I don't have any plan to play games. My main purpose is to study and work (freelancing).
Thank you! I hope I will choose the best decision hahaha.
Then go for it bro. :)) All the best. It will be a great investment for your future.
Hopefully hehe
Spending money to look rich is what many people do, I think it's about creating some certain impression, it comes with being young and I think overtime, we come to learn. Those points you raised are what most young people are financially guilty of .
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That's true mate. Most people are guilty of committing these mistakes. I have friends who are still living in denial and not learning from their past.
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Hey bud, hope you're having a Good weekend.
Firstly I'm trying to follow that path - I'm 19 RN and need your well wishes or advice's like this.
It's happening to me and trying to not get into trouble
Seems like I'm lucky in this matter, i stopped carrying about what other people say, think or wear. I got my own life and gotta make it better in my way
Some cool advice's, really you're so Good educating people through your experience. More respect to you bud. Looking forward to learn more from you.
Yes buddy. You are young and lucky! Found Hive at the right time. There's a lot to learn from others. Use this opportunity to grow your knowledge and wealth.
Thank you so much for all the appreciation. If my content could change one person's life, then that's a huge win for me. Cheers and happy weekend to you as well.
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Imagine if we knew the things we know now back in our 20s, we will be set for life now. We should be grateful to have wisen up, most are still living their lives impressing others swimming in debts.
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Haha right. Better late than never bro. xD 20s are gone. 30s are in. We are here for the win xD
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Thank you for sharing ❤️
Am still in my mid twenties and trying to put things together.
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All the best mate. Cheers! You are gonna make it. ❤️
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It's a good thing I joined a place like Hive in my twenties. I feel so privileged to have all this golden information at my fingertips. Every day, I learn how to be a better person and the mistakes I should never make if I want to thrive in this world.
I so have the tendency to be a spendthrift and one that does not look into savings and investments. But now, I have learned better and am now working up to becoming an individual with a sustainable future. HIve is a positive enablement to achieving it.
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I guess we all are lucky. But you are luckier because you have a lot of time in hand to change your life. No worries though. Life is so, so long!
All the best mate. Spend your money wisely. It's not unlimited.
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Sound advice my friend :)
Not taking bad debt is something I can relate to.
Banks make it too easy to get a ridiculous credit card that in reality, you're never going to be able to pay back without a HUGE interest bill.
Don't take the easy credit, you will regret it.
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Thanks Dane. Banks are the real assholes. They shove those offers down your throat until you buy one.
I have done that mistake. Was a costly lesson. Never going to repeat the same mistake twice. xD
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Those are great points!! I think I made all 3 too!! LOL
Lol. Hi-5 bro. xD We in the same boat. 🚀🚀
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Those are all great pieces of advice. I made quite a few of those mistakes but I have made sure to not make them again
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That's the way. 🤘
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Wow, this content is almost similar to the post I made today. I am glad to realize all this while I am in my twenties brother, and I feel I still have a long way to go.
Right now, I am focused on myself and trying to build my skills. Investing in Crypto and saving emergency funds from HBD earned.
Thank you for sharing your story! This would help younger ones like me. Much love brother!
Haha. Great minds think a like. All the best for your goals. I am sure you are going to crush them. Lots of love and success to you as well brother. Cheers!
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