I realize I’m still young since I am only 25 years old, but there are still several things I would tell my younger self about money.
I definitely was not great with money when I was younger. I made many money mistakes that led to me wasting thousands upon thousands of dollars. I cringe about the money I wasted, but I know that I learned from these mistakes and I am improving my financial life each and every day.
Everyone makes mistakes. The key is to learn from your mistakes and make an effort towards not making the same mistakes again. Dwelling in the past won’t fix anything, but it can be a good reminder so that you don’t fall victim to the same money mistakes over and over again.
Below are seven things I would tell my younger self:
1. Stop buying clothing!
I spent way too much money on clothing when I was younger. For the most part, they were all items I never even wore, or I only wore a few times.
A COMPLETE waste of money.
From about the ages of 16 to 21, I worked as a full-time retail store manager, which meant I was surrounded by clothing 40 hours each week. It was hard not to buy anything, and I often spent thousands upon thousands of dollars on clothing items each year that I did not need.
2. You don’t need a car that is worth more than your yearly income.
I made the ridiculous mistake of buying a nearly $25,000 car when I was just 18. I bought the car brand new, and while I thought I could “afford” the monthly payments, I definitely could not afford the overall purchase. It definitely was not worth it.
I should have been putting the money towards my student loans instead because that extra $400 a month could have been much better going towards debt.
3. You need a REAL budget.
I’ve always had something resembling a budget, but nothing that was useful. If I could, I would go back, sit myself down, and force myself to track my income and my spending. I’m sure if I would have actually tracked my ridiculous spending and had the amount in my face, I would have realized my mistake and hopefully changed my ways.
Instead, I ran away from the real numbers because I didn’t want to face my spending problem.
I made a “wishful” budget. Those do no one good if they aren’t based on actual spending.
4. You need to relax.
Even though I had a spending problem and I wasn’t doing anything to change it, I often felt guilty about anything money-related. I would analyze the littlest purchase, to the point where I would agonize about it and lose sleep over it.
I worked an insane amount when I was younger, and it made life hard. I used working as a way to cope with my dad passing, and when I think back about it, I realize how unhealthy that was.
Since I had such bad spending habits, I had to work as much as I could to make up for that. Whereas, if I would have just come up with a better budget, I could have worked much less.
I should have taken a break, relaxed a little, and spent less money so that I could have worked less. It would have been much better for my life overall.
5. Invest NOW.
We’ve always had retirement accounts, but didn’t aggressively invest or research any investments. Instead, we let most of our savings sit in low return accounts.
So much money wasted!
Read Why You Should Invest and Save For Retirement – Plus a Personal Finance Confession Fail.
6. Negotiate your salary.
I made the mistake of not negotiating any of my salaries when I was younger. I made okay income before, but I always just took what was given and never once questioned it.
I look back and sometimes wonder how much money I left on the table by not negotiating.
7. Skip the private university.
While I do still love the college I went to for my undergraduate degrees, I still cannot believe I spent so much money to go there. I had an almost full-ride to a state school, but decided not to go there because I didn’t think it was the best decision for me.
OH MY GOD.
Yeah, I just said that. I had the option to graduate with pretty much no student loans and my dumb self thought that wasn’t good enough because the private university had a great business program. However, now that I am older I realized that the small difference between the two wouldn’t have really mattered.
WHAT A MISTAKE!
What financial mistakes did you make when you were younger?
How much money did your mistakes cost you?
NZ Muse says
Definitely not asking for a raise. Sigh.
Michelle S. says
Yes, huge mistake! How much money do you think you may have lost out on because of that?
zaby @ Zaby's Perspective says
as your younger self, would you listen?
diane @smartmoneysimplelife says
Ha ha ha… I know there’s NO WAY my younger self would have listened! No. Way.
Michelle S. says
I would like to think I would have Diane 🙂
Michelle S. says
Haha I think I would have listened to some of them 🙂
Leslie Beslie says
I wouldn’t have. I was actually going to post that same comment! Obviously, any advice I give to my younger self will be common sense things that I definitely knew and read when I was in my 20’s. And obviously I ignored that. So of course I would ignore my future self.
And if I did follow my own advice, it just means I’d make other mistakes later down the road, which would be worse (imo) than the mistakes I made in my 20’s. Making mistakes to learn from them is a guarantee so I’d much rather just get them out of the way.
Michelle S. says
I agree Leslie. I learned from my mistakes. I guess I just wish I would have learned from them a little sooner 🙂
diane @smartmoneysimplelife says
I made lots of money related mistakes and I’m pretty sure there are more out there for me to make. By far the biggest money mistake I made was marrying the wrong man. Set me back financially at least 10 years. However, I never seemed to make the same one twice although… I’m not sure that’s anything to crow about.
Basically, I learned everything the hard way but those lessons have definitely stuck.
I guess sometimes you have to make the mistake to truly understand the value of the knowledge.
Michelle S. says
Yes, I agree Diane. Sometimes making the mistake is the best way to learn.
Young Millennial says
Negotiating a salary is hard but it is a conversation you need to have with your superiors. Once had mine, I like to think that higher-ups started to respect me more as a younger engineer. It shows that you know how much you are actually worth…if the salary request is realistic.
Michelle S. says
I agree! I work for myself now so it’s not really something that will come up, unless I negotiate with clients.
Jayson @ Monster Piggy Bank says
My advice to my younger self is to get a higher paying job and start saving as early as getting my first ever salary! Keep that pace.
Michelle S. says
Yes! Thanks for stopping by 🙂
Will @firstqfinance says
I too went private – that was probably a mistake. The school helped me network with alumni far more than a larger school likely would have – and that networking got me a good job. But if I had to do it again, I would spend less on my education.
And sorry to hear about your car being so expensive! Hopefully it was a cool car, at least!
Michelle S. says
Meh the car was cool at the time but not anymore haha
Veronica Lee says
#1 is spot on! But then again, you only live once!. As I grow older, I kinda regret I didn’t wear the clothes that I could have worn when I had the body for it.
Michelle S. says
I spent a lot of money on clothes though. Nothing I am proud of. I definitely could have bought less and still been happy.
Mrs. Frugalwoods says
My advice to my younger self would be to 1) worry less–things will work out or they won’t and either way, worrying won’t help (maybe I should give that advice to my current self…) and 2) track your spending! I would just earn money at my high school and college jobs and then spend it. I was pretty frugal, but, I never sat down and tracked what my money was doing. I probably could’ve saved a lot more had I done that! Oh and 3) stop buying clothes :)!!!
Michelle S. says
Sounds like our younger selves were very similar!
Natalie @ Financegirl says
The advice I would make to myself would be so similar! I would not go to a private university and I would spend much less on clothes.
Michelle S. says
We made some expensive mistakes! 🙁
Nikolina says
Lol, great advice! 🙂 Made me laugh and think at the same time…
Michelle S. says
Haha thanks Nikolina!
Sarah says
I would tell myself not to waste money on clothes and to actually save some of my money and not rack up credit card debt!!! Yikes!!
Michelle S. says
If only we knew this back then!
Stefanie @ The Broke and Beautiful Life says
I think A LOT of kids need to hear that last piece. In my high school, if you weren’t going to a name brand university people were snobs! What a waste!
Michelle S. says
Yes, a huge waste!
Brian @ Debt Discipline says
I wish I could tell my younger self to spend less then you make and have a plan. I left college with no debt and proceeded to rack up over $100k over the next 20 years. Glad to be debt free now, but so wish I start back then.
Michelle S. says
Good job on being debt free!
anna pry says
oh dear, it makes me sick to think about all the money i wasted back then, especially on clothes! i could have saved a huge nest egg if i’d been smarter with my money
Michelle S. says
Yes, same here!
Anton Ivanov says
I always love reading these types of posts 🙂 #1 made me laugh and I’d say that #5 is the most important one. What’s up with so many people waiting until they are in their 40s or 50s to start investing?!
Michelle S. says
I don’t know! It is sad though.
cece says
I know many people who regret their expensive private school education just a bit. I went UC and at the time it felt boring and totally sad to be staying so close to home but in the end I’m so glad I went that route. I would have spent less money on shopping. What’s the point? It’s just clothes. I’ve definitely put the breaks on shopping this year. I NEED to invest more aggressively but I’m scared.
Michelle S. says
Don’t be scared to invest more! 🙂
Wendy@BlushandBarbells says
My biggest mistake was thinking that I couldn’t afford to save. Just 5% of my paychecks wouldn’t have been missed, and I would have had all that compound interest!
Michelle S. says
Yes, just 5% can go far! I made the same mistake.
Amy says
Don’t listen to that girl who told you, “You know, you don’t have to pay your full credit card balance every month.” Worst.Advice. Ever.
Michelle S. says
AHHH! That is horrible advice.
Michelle S. says
At least you learned now 🙂
Andrew@LivingRichCheaply says
Hey at least you got a employee discount right? =) I invested right after I got out of college but did waste some money chasing hot stock picks…it was more gambling than investing. Luckily I did put money into IRA/401K also, and didn’t put too much into individual stocks.
Michelle S. says
Haha yes I did get an employee discount. I think that’s what led to my spending problems!
Connie @ Savvy With Saving says
Oh gosh, a lot of this sounds like me! Especially the clothing part. Just thinking about all the money I spent on crap clothes at Forever 21 hurts a little….
Michelle S. says
Yes, I spent way too much on crappy clothes 🙁
J says
My biggest mistakes were spending money on clothing, and not thinking that saving was important. I’d put a little in a separate savings fund, but I never thought long-term. That was for shopping or entertainment that I was bound to indulge in even thought it was entirely unnecessary!
Great post – I think my younger self would have benefitted a lot from hearing from you as well!
Michelle S. says
Thanks J!
Brian @ Luke1428 says
I would have told myself to a) not chase after the quick money certain investing strategies promise and b) pursue a degree in personal finance. That seems to fit much better with where my attention is now. But no regrets…always moving forward. 🙂
Michelle S. says
Yes, always moving forward 🙂
Kara Bissonnette says
I’ve made the mistake of spending lots of money on cheap clothes vs. buying fewer high quality pieces that would last much longer! Also buying a new car when I didn’t need one. The list goes on and on!
Michelle S. says
Sounds like we made very similar mistakes!
Jayleen Zotti says
It would be hard to work in retail and not buy! I think the biggest mistake we made as a young married couple was selling our duplex instead of keeping it as a rental. It was a bit of a headache but it would have been a great supplemental income!
Michelle S. says
Yes, it was very hard!
Michelle S. says
Oh no! That really sucks! I would be angry.
Jason B says
I made a few mistakes. One was spending that I didn’t have. Another one was just paying the minimum on credit card bills. Those are 2 of the reasons I’m in debt now.
Michelle S. says
Good you realized your mistakes now rather than later. I hope you can get rid of your debt ASAP Jason.
Kayla @ Shoeaholicnomore says
I spent too much on clothes too. Shopping was my coping mechanism after my divorce. I still struggle with shopping for clothes, etc now it’s better than it was before. Slow progress is progress. I have to keep reminding myself of that.
Michelle S. says
Yes, slow progress is better than nothing!
dojo says
The biggest one: getting a huge car loan 6 years ago. Fortunately I was able to pay if off, but it was soooo painful 😀
Michelle S. says
Good job on being able to pay it off!
Tiffany Kinney says
I wasted too much money on clothes!
Michelle S. says
Seems like a lot of us made this same mistake 🙁
Dan @ Our Big Fat Wallet says
Negotiating for a higher salary is something most people (including myself) don’t do – especially when starting out. I wish I would have done that as it is a starting point on what you’ll make for years to come, so its a lot more important than people think
Michelle S. says
Yeah, I was too afraid back then, and I didn’t think it was a huge deal. Huge mistake!
Syed says
It is sometimes comical to me how little I knew about money during college. I know it’s a result of a lot of reading that I know what I know now, but even knowing a little bit more would have helped me a lot. I think the best piece of advice is to invest early. Time is on your side, and with that you can make some mistakes and still recover and aso have more time to allow your gains to grow.
Michelle S. says
Yeah I thought I was good with money back then. What a joke!
Michelle S. says
Yes, every little bit helps!
Joe @ Budget Breakaway says
Great tips Michelle, I think the tip about avoiding car finance is very important to point out as this is a mistake that many people make in their twenties and regret for a number of years!
Michelle S. says
Thanks Joe!
Beth Anne says
I agree with all of these! I’m not even a big clothes person but every few months I go through my closet and think man this shirt looked prettier on the hanger or I’ve barely worn this shirt! I’m getting ready to move and doing a MAJOR DECLUTTERING I have soo much stuff I don’t even use!
I totally agree on budgeting I was scared to know now I’m glad I know even though I sometimes go over budget.
Michelle S. says
I have so much decluttering I need to do. I’m not looking forward to it at all!
Beth Anne says
Yeah I’ve basically been avoiding it for 6 months…..
Michelle S. says
Yeah that markup on clothing is insane. It’s just sad!
Michelle S. says
Sounds like we made similar money mistakes 🙁
Michelle S. says
Yes, same here. Hopefully they listen 🙂
Vanessa says
Love this post! Don’t we all have those moments where we just have to throw our hands in the air and be like, “what was I thinking?” I personally regret a lot of clothing and makeup purchase. The issue I am still struggling with is asking for a raise, heck, even just negotiate for a better salary in an interview. It’s tough and I am still trying to learn!
Michelle S. says
Thanks Vanessa! 🙂
Anna Marie M. says
Learning from mistakes will make us grow. I wish I’d save all my money before but that’s life.
Thanks for this post though. It made me get back to the past and realize not to get back on the current or in the future.
Michelle S. says
Yes, learning from mistakes is a part of life. Thanks Anna for reading 🙂
Christine @ The Wallet Diet says
If you didn’t know me in high school, you would never believe that I had short, spiked pink hair and over 20 piercings (times have REALLY changed!). I spent thousands of dollars on those two things alone. I wish I could have told myself that by 21, I would be back to natural brown and have only my ear lobes pierced 🙂
Michelle S. says
Wow I never knew that!
John says
Awesome post!! When you begin investing from a young age you are only setting yourself up for success later down the road. Also, I think that everyone could agree that too much money is spent on clothing when you’re young. Thanks for the read.
John
Michelle S. says
Thanks John!
Beth Anne says
That seems cheap for rent. Do you wished you had just had a roommate or lived at home instead? I don’t know I wish I could have not had to live at home the few years out of college.
Michelle S. says
I’m sorry Jenna. That stinks. At least you know now!
Michelle S. says
Yes, exactly! 🙂
Beth Anne says
oh okay that makes more sense! I feel your pain!
Jennifer Powell says
I can remember I used to buy a lot of clothing and that is the only financial mistake I made when I was young. Now I do not make this mistake often.
mae abigail songco says
something new to ponder.. thank you 🙂
Joseph Hogue says
Way too much deja vu here with the mistakes I’ve made. I guess we all make them.
The biggest one I see is waiting to invest. Too many people wait to be completely debt-free to start investing in their future. Spending is way too much fun and way too easy. Most will never be completely debt-free and that’s ok as long as its manageable and not high interest rate debt. Putting off investing until you’re debt-free just means you’ll never have a nest egg.
Great post.