Financial Lessons I Wish Someone Taught Me In My Twenties

Oh, how I wish I could hop in a time machine to go back and talk some sense into my 20 year-old self. Like most others in their twenties, I was not very smart with money. I got into debt and didn’t worry about my credit score very much. I didn’t have a care in the world, and I sure had a lot of fun. Now, I wish I had sacrificed a little of that fun to save some money during my twenties. Here are some financial lessons I didn’t learn until my thirties that I wish I would have learned in my twenties.

1. Create an Emergency Fund

When I was in my twenties, I lived paycheck to paycheck. I never had any money in my savings account because I was spending it as fast as or faster than I earned it. I never had anything horrible happen to me living this irresponsibly, but I have seen it happen to others. If an emergency hits and you don’t have any savings, it can be very traumatic. The first financial move everyone should make is to save up six months’ worth of living expenses. Keep this in a savings account to be used only in the case of an emergency.

2. Start Saving Young

I really wish I would have started saving for retirement when I was in my twenties. The earlier you start saving for retirement, the easier it is to build up a tidy nest egg due to the power of compound interest. That extra ten years really would have helped me out. It is a good idea to try and save 10 percent from every paycheck as soon as you start working. This means taking the 10 percent out to put aside for savings before paying for anything else. Anyone who does this religiously from a young age will be sitting pretty when they retire.

3. Stop Eating Out

If you keep track of how much you spend on eating out every month, it can be almost enough to make you weep for the waste of it. When I was in my twenties, I bought my lunch every day. I ate out for dinner probably four or five times a week as well. If I would have brought a lunch from home and only ate out for dinner once or twice a week, I would have saved an incredible amount of money. This is the best savings tip that I can give to anyone, and I sure wish I could go back and give it to my younger self.

4. Don’t Be an Early Adopter

I have always been a bit of gadget lover. When I was in my twenties, I always had to get the first version of the newest technological devices. Over time, I slowly learned that the first generation of technology is generally pretty poor. There are still bugs to work out and it costs a lot of money. If you just wait for the second generation of a product to come out, then you will get a much better product at a much lower price.

5. Keep a Good Credit Score

I never really worried about my credit score until I wanted to buy a house in my thirties. I soon learned that the careless way I handled my credit in my twenties was going to cost me. You never know when you will need a good credit score to make a purchase, so always do your best to keep it as high as you can.