7 Embarrassing Money Mistakes I Made in My 20’s

I grew up with parents who were very good at managing their money. For most of my childhood, our family would have been classified as low income. My parents were missionaries and they chose a career that was never going to pay them a lot, so they had to make the most of every dollar.

Although we didn’t have a luxurious life, we always had everything we needed, and usually a little bit more. I’m extremely grateful for the lessons my parents taught me about money and life, as those lessons have helped me tremendously.

But despite growing up with parents who taught me a lot about managing money, I still made plenty of mistakes. It’s kind of painful to look back at some of the money mistakes I made in my 20’s, but I thought sharing those mistakes may help others to avoid learning some of the same lessons the hard way.

So with that in mind, here are 7 specific money mistakes that I made during my 20’s. For some background, I graduated from college in 2002 with a bachelor’s degree in business and throughout my 20’s I struggled to find a career that I liked. I had a few different jobs in the finance industry before eventually resigning from my job about a week before my 30th birthday. For the past 10+ years, I’ve been self-employed.

7 Embarrassing Money Mistakes I Made in My 20’s

The 7 money mistakes I made in my 20’s are listed in chronological order, not by order of significance.

1. Not Tracking My Accounts Closely

My final year of college, I was ready to get out of the dorms and I rented an off-campus apartment with a friend. That year was a really good experience that gave me sort of a soft transition into adulthood. It was the first time I had to do regular grocery shopping, pay utilities, and stick to a budget.

During that time, I was really careful to keep my expenses within my budget, but I made a mistake by not tracking my accounts closely enough. I rarely used my credit card, but I forgot to change the address on the credit card account and the bill was still going to my parents’ house.

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Since I didn’t use the card very often, I didn’t realize it until it was past due. I could have avoided the situation and saved myself the late fee and interest just by using a simple bill pay checklist to know when the payment was due, rather than waiting on the monthly statement that was being sent to the wrong address.

2. Thinking the Grass is Greener on the Other Side

I had three different jobs (at three different companies) during my first three years after college. None of the jobs gave me what I was looking for in terms of potential for growth. 

My response to being unsatisfied with my job was to look for a different job. My fourth job wound up being a little better and I was there for 3.5 years, but even that job didn’t give me very much potential for the future.

Eventually, in my late 20’s I realized that I needed to take a different approach. Instead of looking for a job that would give me the opportunities I wanted, I started a side hustle (more on that later) and focused on growing my own business.

3. Not Negotiating My Starting Salary

This is one of the biggest money mistakes I made in my 20’s. At every job I ever had, I accepted the starting salary that was offered to me. Each time, I was eager to get out of my current job and I didn’t want to lose a job opportunity because of trying to negotiate a higher salary. 

Because my salary was low, I wound up taking weekend jobs, like working in a restaurant, to make ends meet.

Your starting salary at a job can impact your income for many, many years to come. Most employers will give raises based on a percentage of your income. At my last job, my starting salary should have been about $5,000 – $10,000 higher than it was, but I didn’t negotiate because I didn’t want to miss out on the job. Each time I would get a percentage-based raise, the amount that my salary increased was less than what it could have been if my starting salary was higher.

Employers usually don’t want employees’ salaries to increase too much too fast. As a result, your starting salary at a job is extremely important and it’s worth negotiating.

4. Deciding I Couldn’t Afford to Contribute to My 401(k)

During most of my 20’s, I was contributing to an employer-sponsored 401(k) to get a start on retirement savings. But there was a 2-3 year stretch where I wasn’t contributing anything to a 401(k) because I thought I couldn’t afford it.

At the time, my employer offered a match on contributions, so not only was I not putting any of my own money aside for retirement, but I was also missing out on free money from my employer.

Once I made the change and started contributing, I wished I had been doing it sooner. Because of the tax benefits, the difference in take-home pay wasn’t that significant, and I could have been building my retirement savings all along.

When you’re in your 20’s, retirement savings may not seem like a priority, but that’s really the best time to save and invest. The younger you are, the more time you have for your money to grow and compound. 

5. Buying a House with a Small Down Payment

When I was 28, my wife and I bought our first home. We didn’t have a lot of money for a down payment, so we only put about 5% down. We had no problem qualifying for the mortgage and the monthly payments were well within our budget, but that home was purchased in 2007. The recession hit about a year later, and the value of our property dropped.

Originally, we had planned to stay in that house for at least five years, but in 2010 (just three years after buying the house) we were moving out of the area and needed to sell. We wound up losing about $10,000 on that house, including some expenses for things that needed to be fixed before we could sell it. 

Buying a home with a small down payment definitely puts you in a more risky position, and we learned that those types of things really can and do happen.

6. Not Starting a Side Hustle Soon Enough

When I was about 28 years old, I started a side hustle designing websites for small businesses. At first, I was just looking to make a little extra money, but I quickly fell in love with running my own business, even if it was just part-time.

Up until that point, I had always looked for a job that would give me the opportunity that I was looking for. Once I started my side hustle, I shifted my focus and looked at my business as a solution to get away from frustrating jobs. My only regret is that I didn’t start my side hustle sooner.

If I had started my side hustle five or six years earlier when I first started to get frustrated with my job situation, I might have been able to have more financial success in my 20’s. 

7. Not Taking a Chance on Myself

I spent about a year and a half growing that side hustle business (which turned into blogging about web design) before it got to the point where I felt comfortable leaving my job to pursue the business full-time. Eventually, I turned in my resignation and left my job right when I turned 30.

During my first year of self-employment, I made about 50% more than I would have made at my old job. My second year of self-employment more than doubled the amount that I would have made at my old job. 

In retrospect, I should have left my job earlier. If I had started my side hustle earlier, or taken the leap to self-employment sooner, I would have been able to increase my income at a younger age.

I’d encourage you to try and avoid these mistakes in your own life, but fortunately, it’s possible to bounce back from your mistakes. Even though I wish I would have done some things differently, mistakes offer valuable learning opportunities. 

If you have any mistakes of your own that you’d like to share, please leave a comment.

Author Bio:

Marc is a personal finance blogger at VitalDollar.com, where he writes about managing money, saving money, and making money. He’s been a full-time blogger and internet marketer since 2008 and has grown successful blogs in different industries like web design, photography, and finance.