6 Personal Finance Mistakes I made in My Twenties (But Don’t Regret Now)

By Todd Kunsman

Financial Independence

Published on

Updated on

If you are reading this, you probably have made some personal finance mistakes yourself. And it’s perfectly normal, we all have.

The important part is that you catch some of the mistakes and start working on correcting them.

And now that I’m 30, closing in on 31, I decided to reflect back on all the financial decisions I made in my twenties.

I did make SOME solid choices, especially in my late twenties, but I sure made a lot of mistakes when it came to money.

For a while, I reflected back with a lot of these phrases: “I wish I started XYZ sooner…” or, “If only I knew then what I know now…” and the classic, “I could be so much further ahead…”

But over the last year, I realized the personal finance mistakes I made in my twenties, were important lessons that led me to where I am today. So while many of the below may be somewhat cringe-worthy to read, I actually don’t regret any of it anymore.

If you’ve made some serious personal finance mistakes in the past, don’t dwell on it and look at them as your financial education.

Below Are 6 Personal Finances Mistakes I made in My Twenties

6 Personal Finance Mistakes I made in My Twenties (But Don't Regret Now)

Moved out two months after graduating college

Moving out of my parents house two months after graduating college and not long after starting my first real job. Way to be independent, right?

I was excited to be on my own and do big boy things. Problem was, I was not financially prepared or had much in savings to fall back on. I was too excited about the independence and having my own place.

They weren’t forcing me to be out right away either but I also didn’t want to be that millennial in his parents house until 30+. Needless to say, it would of been smarter for me to stack some money for a little bit and then venture out.

But, when I ran into some rough time financial times a few short years later, it made me realize how important saving, being prepared first, and being a little more frugal can be. I will never put myself in that position of ill-preparedness again, nor have I either.

Bought a brand new car one year after college

I’m currently on the fence about buying new or used. I understand both sides of the argument, so I never judge how someone makes their car decision (unless it puts you in massive debt, don’t do that).

However, I bought a brand new car about a year after graduating college and moving out on my own.

Besides paying rent and all that, I had two student loan payments, some credit card debt, and wasn’t making more than $30,000/year before taxes.

You kinda see where this is going, right?

I love the car I bought, it’s a beast in the snow and I now own it outright. But, this put me in numerous tight money spots and when I lost my job and was barely squeaking by for awhile on payments.

I think this decision while at the time may not have been smart, has made me a better decision maker and also a more self-aware spender today.

Got too comfortable at a mediocre job

While this may not be exactly a direct personal finance mistake, it did affect by earning income and potential to save. I was too comfortable at a mediocre job that didn’t pay well nor was I finding opportunities to expand in the company.

Not to complain (although I kind of am), I was lucky to have a full-time gig right out of college, full healthcare, a 401k (more on that next), and working at a company with highly recognizable brands.

But soon, I was stuck in a cubicle, bored with the mundane tasks, and feeling “blah” about my current and future salary. Sure, I’d get a raise every year, but it would at most add maybe $30 to paychecks.

So what did I do about this? Nothing for four years until I was laid off about two weeks before Christmas.

Yet, as scary as not having a job was, it motivated me so much and I discovered my marketing career path so I could make more and invest more. That job also set the foundation for me not to get too comfortable or complacent with whatever work I’m doing.

I didn’t understand my company 401k (or bothered to learn)

Out of all the personal finance mistakes I made, this one bothers me the most. Why? Because learning the 401k wouldn’t have been hard and I wouldn’t have missed on FREE money.

Going into my first real job, they offered a 401k after 6 months. My parents explained what that is, why it is important, and that I should sign up.

Okay cool, sign me up!

Little did I know, I was not contributing enough to get the company match (free money), nor did I know what was invested or how to look at the account.

So when I was let go from said job, it was cool to see I had about $5,000 saved, but then to realize how much I probably missed out on was a kick in the teeth.

And while it sucks to miss out on money that could have grown since, it made me such an aggressive learner and saver when the next company 401k came around.

I didn’t have a savings plan

Oh sure, I saved some money each paycheck but without doing the math, I know it was less than 5%. Honestly, it might have been closer to 1%.

But, I didn’t really pay attention or seem to really care. I was more focused on paying my bills which is the responsible thing to do. The issue was never looking at my overall finances, total bills, and putting any kind of savings plan in place.

When I did that back in 2014, it really opened up my eyes to spending habits, where I could cut costs, and how I needed to increase my salary.

It’s why I’m glad I never made $40,000/ year during my earl-mid 20’s because I already made no attempt to save or put a budget together.

I couldn’t image making way more at that age and how out of hand my spending may have gotten. I probably would have had the same amount saved with a bigger salary anyway.

Yes, living paycheck to paycheck sucked. Having about $1,000 in savings was not ideal for an emergency fund if I lost my job (Then I did lose my job).

I was ignorant to the stock market

Pretty similar to the 401k issue I had, this was another one of those personal finance mistakes that made me cringe.

I made a lot of assumptions about the stock market, you know the cliched ones:

  • The stock market is only for rich people
  • You’ll go broke investing in the stock market
  • It’s too complicated to understand

Just like the majority of people, I went along with those statements instead of bothering to have an open mind and figure it out for myself.

Unfortunately, there is some truth to all three of those statements:

  • the wealthiest Americans possess more than 80% of the aggregate value of stocks (MarketWatch).
  • If you don’t take the time to learn the basics and approach stocks like gambling, yes you can go broke.
  • There is A LOT of information out there and the media sometimes make the stock market seem complicated. In reality, if you dedicate an hour a week to reading some great blogs and books, you’ll learn quite a bit. I had no background prior to 2014 and have since ready tons of books and 100s of blog articles. Here are some awesome books to get you started.

But you can break the mold by learning on your own and taking initiative. Don’t let the statistics or anyone else discourage you from altering your financial life.

What personal finances mistakes have you made? Do you regret them? Or have they served as a financial education for you?