20 Money Mistakes I Made in My 20s -

I have made more than my fair share of mistakes when it comes to money in my life. I tend to repeat the same mistakes a few times to REALLY make sure that they are mistakes.

If you’re curious about my worst money mistakes I made in my 20s, and want to learn from them, I have plenty to share with you.

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1. Opened a CC Without Understanding How It Worked

Don’t get me wrong, I think that credit cards definitely have a place in your budget if used correctly. But it’s virtually impossible to use credit cards efficiently if you don’t understand them.

When I was 20, I got my first credit card. This was great for my credit score but I had no idea how it worked. I didn’t understand interest, APR, minimum payments, or even what maxing out your credit card really meant.

I got it mainly so I could use it abroad without fees. But this lack of understanding got me into a lot of trouble when I started over spending.

2. I Didn’t Have an Emergency Fund

Knowing what I know now, I don’t know how I got buy without an emergency fund. Okay, probably with credit card overspending, but you know what I mean.

Building an emergency fund is foundational to your budget. Many people don’t want to slow down on paying off debt to build an emergency fund.

I totally get this, I was there too. But the reality is that you need an emergency fund to keep you out of debt if something happens.

Emergency funds are your debt cushion. It doesn’t make much sense to rush out of debt just to have to go right back in it if an unexpected expense comes up.

If I had an emergency fund, it would have saved me a few times from going even more in credit card debt.

Believe me, I get it, even with an emergency fund, horrific things can happen. Unfortunately, sometimes debt is inevitable. But setting up an emergency fund can really help you out in a tight situation later on.

Related: How to Build an Emergency Fund

3. Not Educating Myself on The Price of College and Student Loans

I managed to make it through both my undergrad and my master’s degree taking out loans with no real understanding of how they worked. Don’t get me wrong, I knew eventually I would have to pay them back. But there was no real meaning to that money because I didn’t SEE that money.

I honestly had no idea how much debt I was in, what the interest was, or what my payments would be once I graduated.

I just held on to what society was telling me. I thought that student loans wouldn’t matter because after I graduated I would get a higher paying job and paying them off would be a piece of cake.

Well let me tell you, past self, I’m now graduated, with a higher paying job, and paying them off is, in fact, NOT a piece of cake.

I have around $68,000 in student debt, and if I want to pay it off in 10 years I need to pay over $700 a month. That’s $700 (minimum) that goes to my PAST decisions rather than my future self.

Trust me, I’m not blaming anyone who got into a bunch of student debt. Obviously, because I’m right there with ya.

Honestly, I was convinced from what I heard that it was what I was supposed to do. But knowing what I know now, I would think long and hard before going into THAT much debt in my 20s.

I also think it’s important to point out that you don’t have to go to college. Having a degree doesn’t make you superior to anyone else. And there are so many jobs and careers where a degree absolutely isn’t needed.

4. Not Keeping Track of My Expenses

If you had asked me how much I spent on groceries 10 minutes after leaving Meijer, I wouldn’t have been able to tell you. I had literally NO idea what I was spending money on and definitely didn’t keep track of my expenses.

This lead to a lot of over-spending, and me being extremely unaware of my income vs. expenses.

It also kept me in the habit of spending money whenever I wanted, without real thought to how much it cost (or how much debt it would put me in).

It was tracking my expenses that got to me start budgeting. I realized that in less than a month I spent over $800 on takeout/food delivery.

When I started budgeting and tracking my expenses, my spending started to align more with my priorities.

Now I track all of my expenses with YNAB. This saved me over $6,000 in my first two months of budgeting.

5. I Avoided Thinking About Money

Out of sight out of mind, right? Absofuckinglutely not.

Now let me preface this by saying that I understand how much of a privilege it is to not think about money. No one in my life ever really talked about it (especially if they were struggling with money). So for a while, I managed to perpetuate that.

It wasn’t until I truly had NO money left, and no way of taking out any more loans, for me to realize that I had not been paying any attention to money.

Hitting rock bottom forced me to focus on money, but before that, I think I thought that it would all work out eventually and didn’t want to face the hard reality of how I managed money.

6. Took Out the Max for Student Loans

Not only did I take out the max for my student loans, I went and spent the “refund” on stupid shit.

This heavily relates back to #3 because I didn’t really understand what taking out those loans meant for future me. Plus let’s be real, everyone around me was talking about their FAFSA refunds and what they were going to buy with it. It was normal to me.

I didn’t understand interest, or how much that really added up over time, so it felt way more like free money than an actual loan.

Now that I graduated, and have to start paying that back, I wish that I had only taken out what I needed to cover tuition.

7. I Didn’t Set Boundaries with Money

Ahhhh boundaries. I’m still working on building (and maintaining) those. But what I didn’t realize was that my lack of boundaries in my life ALSO meant that I had a lack of financial boundaries.

I was always there to give people around me money, even when I didn’t have any myself. I didn’t expect people to ever pay me back, and didn’t hold them to it when they said they would and didn’t.

In a perfect world, I would love to have enough money to give whenever I wanted to, but that isn’t my reality now and DEFINITELY wasn’t my reality then.

This lead to some really unhealthy relationships with people who definitely took advantage of my lack of boundaries around money.

Now I set aside money for donations and random acts of kindness, but only enough that I can afford.

8. Bought Tons of Cheap Clothes

I’m not someone who has jeans in their closet from 7 years ago that I still wear. Not only has my weight fluctuated throughout the years, but I also never really invested in quality clothes.

I loved Forever 21 and H&M and SWORE that I was getting the most amazing deals. Yet somehow, all of those clothes managed to disintegrate in the washer after the first 1-2 uses.

This lead to me constantly buying new clothes and not really caring about taking care of the clothes that I had. I mean they probably wouldn’t last long anyway, right?

Since I have started to invest in clothing that is higher quality, and that I actually see myself wearing in the distant future, I purchase clothes way less often.

This actually saves me money in the long run, and contributes to a lot less waste.

9. I Didn’t Have a Budget

The “B” Word.

I really thought that budgeting would be so restrictive. I had this picture in my mind of Dave Ramsey’s budgeting.

You know the kind where you are supposed to cut out basically everything and “never see the inside of a restaurant” until you were debt free.? Yeah no thank you.

I had no idea that budgeting could actually be freeing, and that I wouldn’t have to give up all of the things that I loved to do it.

This is something that I cherish here at the ATB.

Budgets are supposed to help you spend money on the things that you want to spend money on. They are not for restricting, self punishing or to shame yourself out of spending money.

Related: What even IS a budget?

10. Spent So Much on Makeup

Fun fact about me, I used to have a YouTube channel for makeup. I was what Jenna Marbles would call an aspiring “Beautuber” (is that how she would spell it?).

I actually had tons of fun with that channel, and I love doing my makeup. But I definitely got caught up in the beauty culture of constantly buying more, more, more.

I have given away SO much makeup, and I still have enough that it’s overflowing my vanity drawers.

While I still love makeup, I realized how much I was wasting by buying palettes I used once, or honestly never even touched.

Now I like discovering makeup that I see myself using constantly.

I really think about if I already have something similar at home, before buying the newest makeup launch. Which let’s be honest, 99% of the time I already do.

11. Got Caught Up in the Credit Card Cycle

For about 2 years I was caught up in this cycle of paying off my credit card balance with a personal loan, just to rack up my balance on my credit card again. This resulted in me having 3 personal loans to pay off at one time at the beginning of the year.

Instead of using a personal loan to consolidate and refinance my debt for a lower payment, I ended up viewing my available balance as extra money still.

While I made one step toward paying off my loans, my mindset about money and budgeting didn’t change.

So of course I went back into the same cycle over and over. It wasn’t until I actually started budgeting that I was able to get out of that cycle.

12. I Didn’t Have a Savings Account

Okay I HAD a savings account opened at a bank, but I didn’t ever have any money in it.

Even though I had heard about making yours savings automatic, I didn’t.

This resulted in me never having a steady balance in a savings account.

At one point when I was 22, I had a savings for a while. Unfortunately, I kept it at the same bank where it was easy to take money out of it throughout the month when I was overspending.

Therefore, that savings depreciated really fast.

Due to my lack of savings, of course I kept getting more in debt because any time I had a big purchases, I just put it on my credit card.

Not having a savings account meant I started from ground zero when I began budgeting.

13. Lived Above My Means

This is really present in all of the other mistakes, but I think it’s important to emphasize this. I had no sense of lifestyle inflation.

Lifestyle inflation is where you continuously keep moving on to bigger and better things, so you get used to living that way.

I was used to eating out all of the time and buying things without thinking about a budget. Therefore, it was all too easy to just stay in that cycle.

Living above my means made it really hard to transition to a budget at first. And it definitely contributed to a lot of my credit card debt.

14. Got Caught Up in “Hauling” Makeup and Clothes

This definitely came out of my time as a “beautuber”. I saw everyone else doing makeup hauls and clothing hauls, that I told myself it was normal.

Part of me thought that if one day I made a lot of money on YouTube, then it wouldn’t matter if I overspent on makeup because I could just pay it off in the future.

Obviously, that was a VERY bold decision. But it was my mindset at the time.

I took pride in how many points I would get from Ulta. I think I really got sucked into the trap that since I was getting points, the spending was justified.

This just resulted in me having way too much stuff and way too much debt.

15. Diet Foods, Vegan Luxury Foods, Etc.

I can’t even begin to fathom how much money I have spent in my 20s on “diet” foods or special vegan foods. I was vegan for a couple of years and WOW vegan food can be expensive.

And yes I know that rice and beans are cheap, but who only wants to eat rice and beans?

If you want to eat the fun vegan foods, you pay 2-3x more for them than their regular counterparts.

Same thing goes for all of the special diet foods that I bought.

And all of those things were supposed to make me healthier and happier, but what I learned was that it just created a really unhealthy relationship with food (and money).

Now that I allow myself to eat whatever, I don’t crave foods the same way I did when I restricted them.

Spending money on diets, and the special foods that come with them, was definitely one of the biggest wastes of money.

16. Making a Habit Out of Starbucks

Now don’t get me wrong, I love Starbucks. And if you’ve read my posts before, you may know that I totally believe that you should spend money on the things that make you happy. This includes $6 coffee.

My problem was that I wasn’t getting daily (or honestly, sometimes twice daily) Starbucks because I really enjoyed it. I did it because it was just a habit. I just got used to going through Starbucks and getting a drink every day.

Half the time, I wasn’t even sure what I wanted, or that I really wanted anything. It just seemed like if I had some extra time to kill, I would go to Strabucks and get a drink.

So this wasn’t money well spent, it was money spent just to spend it.

Now when I go to Starbucks it’s because I am really craving something, or want to go sit down and enjoy a cup of coffee while I work. I don’t go just to go. And now I enjoy it SO much more.

17. Constantly Getting My Nails Done

Oh my god. What a WASTE of money. Not only do I actually love painting my own nails at home, but I basically ruined my nails every time I would go and get them done.

I didn’t get my nails done enough to get them removed properly. Most of the time my gel polish would peel off and leave my nails exposed and really thin.

Now that I do my nails at home, I love it so much more.

They are strong, and I get to take time out to do what I love, and I don’t spend $50-80 each time.

18. Not Contributing to a Retirement Account

This is a BIG one. I honestly didn’t even understand retirement accounts until this year, and I definitely didn’t contribute to one.

This left me starting from ground 0 at 24. I had never contributed to a 401k and hadn’t even heard of an IRA. This took away valuable years of compounding interest that I missed out on.

And due to my massive student loans, I really can’t contribute how much I would like to right now.

Luckily, I did learn about retirement accounts in my mid 20s, and am able to put some aside. But I really wish that I would have started sooner and let that money grow for longer.

19. Surrounding Myself With The Wrong People

This may not sound like a money mistake at first. But surrounding myself with the wrong people meant that I ended up spending a lot of money that I didn’t have.

Like I mentioned before, I often let people take advantage of my willingness to pay for things. But it wasn’t just that that contributed to me making money mistakes with others.

I also surrounded myself with people who spent tons of money on really dumb shit, which just perpetuated this idea of money in my head.

This isn’t to say all of my friendships were bad. I had, and still have, some amazing and incredible people in my life. But not all of them were good.

This lead me to spending even more money, and kept perpetuating the cycle I was in.

20. Impulse Purchases (Especially the Big Ones)

I am naturally someone who tends to do things on a whim, especially if I don’t think it will negatively impact anyone else. I like to be spontaneous and get bored thinking through decisions.

I definitely tend to just go with my gut.

Sometimes this is great and works out in my favor. Sometimes it costs me a LOT of money.

One thing I did over and over in my early 20s was buying things, even big purchases, without researching them. This lead to really shitty decisions (like DIYing my own couch which broke in less than 6 months).

I also would buy cheap things from shady websites, which lost me tons of money when the item either wasn’t as described, or never showed up.