20 Money Lessons I Would Teach My 20-Year Old Self
Some of the links in this post are from our sponsors. Read our disclosure to see how we make money.
I like to live life with no regrets. We only get one opportunity to live and try to leave everything on the field, so to speak. Otherwise, what’s the point? Now that I’m in my 40s I have the opportunity to look back on my 20s and see some of the mistakes decisions I made and how I’ve grown, changed and hopefully improved over the past few decades.
This is an important exercise to go through every once in awhile. Not only can it help you identify areas for growth now, but also times where you were stressed over a decision that turned out not to be worth stressing over (though it never seems that way in the middle of the situation 🙂 ). As a parent of kids who seem to grow too fast, these money lessons are important as the exercise helps us raise our children with more wisdom so they hopefully won’t make the same exact mistakes we did. So, if I were to have a conversation with my 20-year-old self, it’d go something like this:
Money Lessons I’d Give My 20-Year Old Self
- Spend on experiences, not stuff. Stuff begets more stuff and just collects dust. Experiences change you, hopefully for the better, and open your eyes to opportunities you otherwise might have missed.
- There is no such thing as free money. I’m looking at you, student loans. Going to college can be a great thing, but if you must finance something, make sure it’s an education – not a lifestyle.
- Listen to your gut. If your gut tells you “no,” then follow its advice.
- Say “yes” more; you never know where it’ll take you.
- Don’t drink as much alcohol. I know you’re supposed to enjoy your 20s and alcohol is usually a part of that. Just be balanced. The extra weight gained, fuzzy memories and cost aren’t worth it.
- Take a specific amount of money out of each paycheck you earn (starting with your very first one) and save it. It doesn’t have to be much in the beginning; it can even be as little as $5 per pay period, but that’s not the point. The point is to start a saving mindset early and think about your future often. Thankfully there are tools today, like Simple, that help you use a goals based saving mentality to hit what you want.
- That extra 10% off you got for opening a credit card in a store…you still have to pay the other 90%. Pay with cash and don’t give into the marketing trick of financing your purchases.
- Challenge yourself to learn something new at work each week. Not only will you stand out at work, but also you never know where a new skill will take you professionally.
- Consider your college major seriously. Sure, something like History may be fun but will it help you get a job? You need to look at college as an investment and pick a piece of paper that will actually help you do what makes you happy and help you establish financial independence.
- Open a Roth IRA as soon as you can. Investing may not sound like fun and it may be difficult at first, but you can start investing with $1,000 or less and watch your money grow. Thankfully there are many options out there today that help you start investing with little money – like Betterment – they’ll even manage it for you too.
- Don’t be afraid to go it alone. Getting advice is important, but not everyone is an expert or credible. You want to live your life, not what someone removed from the situation thinks you should do.
- Travel more. There are so many areas and cultures in this world to experience. You’ll be a more well-rounded and experienced individual by getting out there and seeing it firsthand.
- Surround yourself with friends that share the same basic financial goals. If you spend most of your time with spenders, they may not understand your desire to be financially healthy.
- Save up your money until you can buy a car outright. If you have to have a payment, keep it as low as possible. A car is something to get you from point A to point B. That’s it. Oh, and it’s a depreciating asset, which means the longer you own it, the less it’s worth. A car payment doesn’t make you more of an adult; it obligates you to someone.
- You will make money mistakes. It’s a fact of life. Don’t beat yourself up too much. Learn from the mistake, grow and vow to never make it again.
- You’re only in your 20s once; enjoy it. Don’t use them as an excuse to live foolishly, but rather as a foundation for growth in your 30s.
- Make your LinkedIn profile look professional. Employers will look at it before interviewing you; the last thing you want is to not look your best. While you’re at it, clean up your other social media accounts too.
- Learn how to start a budget. I know it seems restrictive and won’t allow you to have fun. It gives you freedom to love life, trust me.
- Start a side hustle. Like #8, you never know what you’ll learn from starting a side hustle. If learning isn’t enough motivation, the extra money isn’t too shabby either.
- Learn from your parents – both the good and bad. They may not be your most favorite people at times, but they can be a wealth of information and education. Plus, once they’re gone you can’t get them back. Cherish the moments you have with them.
What are some things you wish you could tell your 20-year-old self? What’s one thing you did well in your 20s that you’ve built on in later years? How soon did you start saving for retirement after graduating from college?
John is the founder of Frugal Rules, a dad, husband and veteran of the financial services industry whose writing has been featured in Forbes, CNBC, Yahoo Finance and more.
Passionate about helping people learn from his mistakes, John shares financial tools and tips to help you enjoy the freedom that comes from living frugally. One of his favorite tools is Personal Capital , which he used to plan for retirement and keep track of his finances in less than 15 minutes each month.
Another one of John's passions is helping people save $80 per month by axing their expensive cable subscriptions and replacing them with more affordable ones, like Hulu with Live TV.