10 Things I Wish I Knew About Money

What I Wish I knew about Money

Now that I’m in my late twenties, I think back and wonder where I would be financially if I knew then what I know now. I’ve learned so much in the past decade and wish someone would’ve given me some money advice before I got myself into all this debt.  Below I’ve listed 10 bits of financial advice I wish I knew in my early twenties:

  1. Have an emergency fund

    If you’re familiar with Dave Ramsey, you know that the first step in his program is to save $1,000 in an emergency fund. Before I started his plan I was living paycheck to paycheck with no type of savings fund for emergencies. I was throwing all the extra cash at my loans which ended up backfiring. Of course, unexpected expenses came up and I either a) ended up overdrafting my checking account or b) used my credit card. I wasted so much money on overdraft fees that it makes me cringe when I think back to those times.

    Now, I make sure to always have $1,000.00 in a separate savings account just for emergencies. This has kept me from having to borrow money or overdraft my account. Not to mention the peace of mind it gives me to know that I have that cushion. It is so worth it!


    I heard the following quote a while back and it has stuck with me since:

    “If you don’t tell your money where to go, you’ll end up wondering where it went.”

    I agree with this 100%.  Nowadays, as soon as I get my paycheck, the first thing I do is start allocating every dollar until I get my budget to zero. By assigning each dollar a task, I am making sure I know where my money is going and am not mindlessly wasting it on small purchases that can add up to a substantial amount at the end of the month.

    In my early twenties, I was never really on a budget and thought that keeping track of my finances meant periodically checking my bank account throughout the month to make sure I still had enough money left. Let me tell you, that did not work out very well. Trust me, those small everyday $2 – $5 dollar purchases that don’t seem like much, start to add up very quickly.

  3. Pay with Cash

    It’s amazing to see how my spending habits change just by merely choosing to pay with cash instead of swiping my card. Something about letting go of a crisp dollar bill feels different and makes me really consider what I am purchasing. Since starting my debt payoff journey I have switched to making everyday purchases with cash. I still use my card to pay for gas and online payments since it’s so much easier than mailing in checks. But, just switching to paying with cash on my everyday purchases has allowed me to be more conscious of where I am spending my money. I recommend using the money envelope system to organize your cash and stay on budget.

  4. Live Below Your Means

    This is such an obvious concept but it’s something I didn’t tend to follow once I started working and making money. Looking back, I blame making this mistake on the evil comparison monster. Comparing our lives to the “Joneses” can lead us to make big purchases or increase our lifestyle, even when we can’t really afford it.  I’ve learned that just because someone your age is driving a nice car or just bought a house doesn’t necessarily mean they are in a great financial place to do that.  A lot of people don’t live below their means and are just living paycheck to paycheck. It’s important to analyze your complete financial situation and make sure you have the right priorities in place so that you are aware of the type of lifestyle you should be living.

  5. Think twice before getting an auto loan

    A year after graduating college,  I bought a 2-year-old used Jetta Volkswagen. The car l had been driving since high school started giving me too many problems and I was getting fed up. I was aware of how much new cars can depreciate in value the first few years so I knew I wanted to buy a used car. Because I was trying to pay off my debt, I had no savings and ended up getting a loan. Looking back I wish I would have saved some money and bought an older less expensive car in cash. I currently owe around $5k on that Jetta and I’m pretty sure I would almost be debt free if it weren’t for that.

    If you are looking to buy a new car, there is a great video called  Drive Free Cars for Life that I recommend you watch. This video outlines the benefits of not having a car payment and makes you realize how much money is wasted on these monthly payments.

  6. If you can’t afford it . . . don’t buy it.

    The meaning of  “affording” something has changed the more I learn about personal finance. I used to think that affording something meant I could purchase something by making the monthly payment, whether it was a loan or credit card payment. Now I realize that if I need to borrow money for it, I can’t afford it and should not buy it.

  7. Make Savings a Habit

    When you’re young it’s easy to put off saving money for later. Especially when saving for retirement, time is your best friend when used in conjunction with compound interest. It’s amazing to see how much of a difference time can make when investing money.  This is one of the reasons I am so anxious to pay off all my debts, so I can finally start contributing to my IRA. Business Insider has an article  with a chart showing the benefits of saving early.  The truth is the amount of time you’ve been saving outweighs the amount of money you save. How I wish I would’ve invested some of the money I made in high school before I had any of this debt!

  8. Money doesn’t buy happiness

    Growing up I remember having the mentality of, “once I have X thing,  then I’ll be happy”, knowing very well that once I bought that item there would always be something newer and better that would catch my eye.   It’s so easy to get caught up with material things when you haven’t taken the time to figure out what’s important to you.  Over the years I realized that material things will only bring you happiness for a short amount of time. As cliche as it sounds, “Money doesn’t buy happiness”, at least not the long-term healthy type of happiness.  Learning to be happy without the help of material possessions is one of the greatest lessons I am grateful to have learned.

  9. Have a financial plan

    Laying out a financial plan and looking 5, 10, 20 years into the future and picturing where you want to be is a great motivator to help keep you going on your financial journey. It’s only by planning and writing your goals down that you are going to get there. I think Dave Ramsey’s book, The Total Money Makeover is a great place to start if you don’t know where to look.


  10. Stay out of debt!!

    If there is one bit of advice you take away from this post it’s this. Do whatever you can to avoid getting into debt. The amount of money you waste paying interest, along with your peace of mind is not worth it. As they say: The borrower is slave to the lender. And I could not agree more.

There you go, these are 10 things I wish I knew going into my 20’s. Hopefully, these tips can help someone who was in my situation years ago.

What advice do you wish you would have taken in your early 20s?

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  • I wish I had realized that with no kids it would have been SO EASY to get a second job in the evenings or on weekends to make extra money for savings and paying down debt. I think back and wonder how on earth I thought I was busy when after I got off work at 4:30pm, I had no commitments.
    Or I wish I had monetized my blog when I was younger. I had a good readership but I didn’t think to monetize it, and since it just became something that took up time, I quit doing it.

  • I wish I didn’t wait until 24 to start investing! I wish I didn’t wait til 31 to give an honest shot at authentic blogging….Wish I made a better effort at dating in college when there were a surplus of women around. Lots of wishes, but can’t turn back time.

    Agree with you though, hopefully some folks starting out can learn from our mistakes. That’s such a motivator in blogging, that someone else can pick something up from whatever crazy thing I did (or chose tno to do) and make their own life better.

    It’s tough to move past the “if I achieve ____, then I will be happy.” mindset. If you’re already there in your 20’s, I envy you. ::)

  • #8 for sure! Also, I think $1,000 is a great emergency fund, but I’m working on building to $5,000 because that’s how much deductible I’d have to cough up to make a repair if something big happened to our home. Thanks for the info! I’m working on living under my means now and definitely wish I’d started sooner!

    • Yes! I’m glad to have finally made the realization that money does not equal happiness. Bumping up your emergency fund is a smart move. This ensures you won’t be forced to borrow money in case of a pretty big emergency. It’ll probably give you much peace of mind once you have that fully funded.

      Thanks for taking the time to read this post!