One of the topics I really want to talk about here in my blog is the business aspect of blogging and freelancing, as well as money management. Now, I know money is an uncomfortable subject to talk about, but it is a fact of life. The more comfortable you become in speaking about it, the more successful you tend to be in terms of accumulating money and living comfortably. So, in the spirit of money management and financial gains, I’d like to share the big mistakes I made with my money in my twenties, which have definitely taught me some really great lessons and have shaped how I deal with money now that I’m in my thirties.
Leasing and Buying a Car
Cars are such a precarious investment, I learned. They basically depreciate as soon as you drive it off the lot. When I leased my first car, I thought I was saving money because I have lower monthly payments. But in actuality, I didn't consider its long-term effects.
Before I continue this story, though, it’s important to note that when you lease a car, you only get a finite amount of miles you can use. Now, for the first couple of years that I was leasing my car, I was only driving it to and from work, so I wasn’t using it that much. But then, I went back to school and had an overall two-hour-long commute.
Long story short, when my lease was up, I had gone way over my allotted miles. So, it made much more sense to sell it back to the dealership and buy brand new, which is another huge mistake. I financed this new car for five years, and I was paying way more interest. By the time I paid it off and was ready to sell, it was basically worth nothing.
Now our family only has one car, which my husband and I share. We bought it used off of a dealership, and it saved us so much money while still giving the benefits of a new car. I wish this is something I had known in my early twenties, but it was also a big financial lesson for me. If you’re thinking of getting a car, just be aware that it’s not necessarily the best way to invest your money, and I hope you will not repeat my mistake.
Living at My Means
What this means is that all of my monthly earnings went to paying my living and everyday expenses. This includes rent, groceries, going out, and everything in between. Back then, this didn’t seem like a big deal, especially since I’m not going in debt and I could afford everything I needed to buy. But, I've learned as I've gotten older that it’s really crucial to live beneath your means and save up, especially if you want to live a comfortable life. This way, you have a cushion, should anything happen.
While living beneath your means isn’t as exciting as spending your hard-earned money on more things you like, it’s crucial in building up good savings to give yourself that allowance if things don’t go according to plan (because, guys, life doesn’t always go according to plan!). This wasn’t something I was thinking about in my early twenties, and as a result, I started saving for my future a lot later than I could have been.
This goes hand in hand with my previous mistake. Now, I did save in my early twenties—I would use the majority of my earnings for my lifestyle and also save a little bit of a nest egg, but it wasn’t for anything long-term. My savings were always for a particular tangible goal, product, or experience, and never for future planning.
One instance was when I used all my savings to cover my summer trip to Europe. I didn't have any plans for that money over and above that trip. Once it’s over and I got back, I was back to square one.
While I did get into a habit of saving in my twenties, that money was always doomed to be spent and I would start at square one again. Now, when I look at my savings method, it's so much easier to have a savings plan that’s going towards retirement or a rainy day fund. But, I also have savings for anything tangible I may want in the future.
Buying for Specific Situations / Situational Shopping
We can't talk about money or money management without shopping habits. When you're young, it’s definitely very tempting to just go and blow your money on anything. And, a big mistake I’ve learned I made in my twenties is that I would do situational shopping. Meaning, if I had a party coming up, I would buy a dress for it, and it was a one-and-done thing—buy the dress, wear it to the party, discard said dress, move on. The same thing goes for anything material, too.
On top of my disastrous money management, I also found that I curated a very disjointed wardrobe with this habit—I bought cheap, fast fashion clothes, which were disposable and bad for the environment.
Now, in my thirties, I've learned to be a little bit more mindful with my shopping. I’m more apt to buy a dress and wait for a certain or multiple locations to wear it, as opposed to buying a dress for only one occasion. When I started implementing this, I found that I've saved so much more money, and I'm less likely to make poor financial decisions.
Eating Out for All Meals
I spent a lot of money on food in my early twenties—and I’m not talking about groceries. I worked as a waitress and a bartender, so I was in restaurants all the time. Because I was working really crazy hours, I ate the vast majority of my meals out—and I don't have to tell you why that is a bad financial decision. It is so expensive to eat out, even if it seems inexpensive at the time. That’s basically money you're never going to see again.
Another detriment to that is I really didn't learn how to properly cook for myself or do groceries—you know, tangible life skills. These came a little bit later for me.
Choosing to pay for convenience definitely comes at a price. I'll be honest, I still struggle with this “eating out” issue on a weekly basis. I feel like we eat out way too often, but we certainly eat at home a lot more, and I saved so much money than before.
I like to think I have learned a lot from these experiences and, while I'm certainly not perfect, I've continued to learn. It's always nice to look back at what you did before, just so that you don't make the same mistakes. It’ll also help to shape you into being a bit better of a saver and money manager moving forward.
While money is definitely not the most fun topic, I think it's important to get the dialogue going. The more comfortable we are talking about money and finances, the more mindful we become when we think about these things, and that just leads to a more prosperous future! So, what about you, what are some mistakes you made—or are even making now—in your twenties? What lessons have you learned from it? Let us know in the comments section!