Money Mistakes I Made in My 20s That Cost Me Thousands. Your 20s are full of “firsts”—first job, first apartment, maybe even your first serious financial mess. I’ve been there. I learned a lot, but it came with overdraft fees, credit card interest, and more than a few sleepless nights.
If I could go back, I’d do a few things differently. Here’s a breakdown of the biggest money mistakes I made in my 20s and how you can avoid them.
1. ❌ Not Budgeting—At All
I treated my bank account like a black box: money went in, money came out, and I hoped for the best.
How It Cost Me:
- I overdrafted multiple times in college and paid $35 per overdraft fee.
- I once missed rent because I didn’t realize my car insurance auto-drafted two days earlier.
What I Learned:
Budgeting doesn’t mean being cheap—it means being aware. Even a simple app like Mint, YNAB, or PocketGuardwould’ve saved me hundreds.
💡 Tip: Try a “no-spend weekend” once a month. It helps reset your habits and exposes unnecessary spending patterns.
2. 🧾 Only Paying the Minimum on Credit Cards
I had a $2,500 limit. I maxed it out in 3 months buying clothes, electronics, and eating out. Then I only paid the minimum $50/month for over a year.
How It Cost Me:
- I paid nearly $800 in interest on the original $2,500.
- My credit score dropped because my utilization ratio was maxed out.
Why This Happens:
In your 20s, credit card companies target students and young adults, offering perks and points without explaining the risks. It’s easy to swipe your way into trouble before fully understanding what “APR” even means.
How to Dig Out:
- Use a debt avalanche method: Pay off highest-interest cards first while making minimums on the rest.
- If your credit score is decent, consider a balance transfer card with 0% interest.
- Automate payments and set up text alerts to avoid missing due dates.
💡 Bonus Tip: You can actually call your credit card issuer and ask for a lower interest rate—it works more often than you’d think.
3. 💤 Ignoring Student Loans Until It Was Too Late
After graduation, I ignored my student loans, assuming I’d deal with them “later.” That “later” came with $1,200 in extra interest and some major stress.
Mistakes I Made:
- Didn’t make small payments during the 6-month grace period.
- Ignored loan servicer emails and missed out on income-driven repayment options.
What Helped:
- Setting up auto-pay (some lenders reduce your rate just for enrolling).
- Using the debt snowball method to tackle loans by balance or interest rate.
- Using a student loan calculator to understand my actual payoff timeline.
💡 Tip: Even if you’re not required to make payments yet, paying interest monthly can save you thousands long-term.
4. 📱 Letting Lifestyle Creep Set In
As soon as I got my first full-time job, I upgraded everything:
- Moved into a downtown apartment for $1,500/month
- Financed a brand-new phone and laptop
- Ate out 4–5 times a week “because I could”
How It Cost Me:
- I was earning $42k/year but living like I made $70k.
- I saved almost nothing for two years despite working full time.
What I Should’ve Done:
- Kept fixed costs low (rent, car, subscriptions).
- Increased my savings rate as income rose.
- Used windfalls (bonuses, tax refunds) to pay off debt—not splurge.
How to Fight Lifestyle Inflation:
- Set a fixed savings percentage and increase it with every raise.
- Keep “fun” money capped—10% of your take-home pay is a good rule.
- Ask yourself: Is this purchase for value or for validation?
💡 Mindset Shift: Being able to afford something doesn’t mean it’s the best use of your money. Future Youdeserves a cut of every paycheck.
5. 📉 Not Investing Early
This one stings the most. In my early 20s, I thought investing was only for rich people. I left money in savings accounts earning 0.01%, thinking I was being responsible.
The Reality of Waiting:
- If I’d started investing just $100/month at 23, by 63 I’d have $288,000+ (assuming 8% annual return).
- I didn’t start until I was 28, and that delay cost me over $100,000 in potential compound growth.
How I Got Started:
- Set up a shares account and set up automatic deposits into VTI (Vanguard Total Market ETF).
- Learned from podcasts (ChooseFI, BiggerPockets), Reddit forums, and YouTube.
What to Know:
- You don’t need to pick stocks. Index funds are great for beginners.
- Time in the market > timing the market.
- Many platforms (Fidelity, SoFi, Charles Schwab) let you invest with as little as $1.
💡 Quick Start Tip: If your employer offers a 401(k) match—take it. That’s free money you’re leaving on the table.
6. 🙊 Not Talking About Money
Money felt like a taboo topic. No one around me talked about budgeting, investing, or debt—and I didn’t want to sound clueless.
What It Cost Me:
- Missed chances to negotiate salaries
- Didn’t know others were also struggling with debt
- Learned key lessons years later than I needed to
What Changed:
- I started asking friends what budgeting tools they used
- Joined personal finance forums and subreddits
- Followed creators like @thebudgetmom, @herfirst100k, and @clevergirlfinance
💡 Tip: Be the friend who’s open about money—how you budget, save, invest, or mess up. It helps everyonegrow.
🎯 Final Thoughts: Regret Less, Learn More
I’m not proud of how much money I wasted in my 20s—but I am proud of how far I’ve come since.
Financial mistakes are part of the journey. The good news is: you can recover. It’s not too late to build savings, fix credit, invest, or change your habits.
You don’t need to do everything overnight. Start with one small habit:
- Track your spending for one week
- Save $25 this month
- Open an investment account and learn how it works
Start small. Stay consistent. Your future self is already thanking you.
🧰 Tools & Resources I Wish I’d Used Sooner:
| Tool | Purpose |
|---|---|
| YNAB | Zero-based budgeting |
| Mint | Free budget tracking |
| Fidelity Roth IRA | Tax-free investing |
| Ramsey Snowball Calculator | Debt repayment planning |
| Investopedia | Learn money terms |
| CoinTracker | Crypto tax tracking |
Disclaimer:
This blog post is for informational and educational purposes only and does not constitute financial, investment, or legal advice. While I share personal experiences and general money tips, everyone’s financial situation is different. Please consult with a certified financial advisor, accountant, or tax professional before making any major financial decisions.
