20 Things About Money I Wish I Knew in My 20s

There were so many things that happened when we were in our 20s.

Some of us graduated from university. Some went on to continue with their schooling, while some began climbing their career ladder. Some married and started their own families. However, this was also the time when most of us began handling our own money. How did you do it?

Well, it didn’t exactly go as planned for me — money-wise. There were a lot of good things but there were a lot of mistakes as well, maybe even more! If I could send a letter to my 20-something self and give valuable financial advice, I would. I doubt my 20 year-old self would listen though…..I’m unbelievably stubborn when I was young! *sigh*

Here are 20 things about money I wish I knew in my 20s.

20. It’s never too early to prepare for retirement. Don’t wait until it’s too late.

Take advantage of your youth as time is still on your side. Start saving up for retirement by making it a part of your budget plan. Set aside even a small amount of money (the more you earn, the higher the amount you can set aside). What matters is that it’s regular.

19. You need to be prepared for emergencies at all times. Be prudent.

Being young doesn’t mean being invincible. Emergencies can happen to anyone, and being the young adult that you are, the best thing you can do is not view your parents as your emergency fund. While you’re young, begin building your emergency fund the same way that you should be building your retirement fund.

PS: The emergency fund is ideally 6 months worth of your salary just in case you lose your job.

18. It’s not embarrassing to want to be rich, but don’t be materialistic. Live wisely.

Talking about money already has a stigma in some societies, so imagine the kind of stigma that comes with admitting that you want to be well-off. I see nothing wrong about it; it’s just being practical; especially for parents who want to give their children a comfortable life. However, be careful to not give into materialism.

It’s okay to possess some material things, but do not let material things possess you.

17. At the same time, it’s not embarrassing to admit you can’t afford something. Be practical.

There is nothing wrong with admitting that you cannot afford something. It is better to be completely honest with everyone around you than live a pretentious lifestyle. There’s only so much you — and your wallet — can fake take.

16. You are not supposed to spend 100% of your salary. Prepare for the rainy days ahead.

The first time you hold your hard-earned cash is an exciting moment. However, your salary is not meant to be, well, drained. Instead, every time you receive your salary, set aside a portion of it as payment for yourself. This is meant to go to your emergency fund and/or retirement fund or even just a fund you want to set aside for a specific reason. Always, always pay yourself first, even before you pay your rent, even before you pay your bills. The amount of money left after all of these is the amount you can spend.

15. Credit cards are not your best friends. They offer temporary satisfaction.

If you must get a credit card, get only one. But don’t ever use it as if it’s a magical genie of some sort. It doesn’t give you money for the latest iPhone — you are indebted to it. You are supposed to pay it back, interest and all. It is not your best friend.

However, you can use it as a replacement for money during times you prefer to bring a card instead of cash. It is a tool for transaction, not a wishing well. You can use it as long as you can pay with cash whatever you’re buying. You can also use it to get perks and discounts — just as long as you’re not buying what you cannot afford.

14. You will regret wasting your money on the latest phone, car, fashion, etc. Invest in things that matter.

The latest trends will always be pretty, always be eye-catching, but will always be fleeting, too. It’s a vicious cycle. Just as when you finally have your hands on the latest anything, a newer, prettier version will emerge. Trust me; nobody except the brands win the trend game.

Instead, place yourself above these trends. Invest in things that matter. Invest in something you can use for years. Invest in something the whole family will benefit from. Invest in travels, invest in relationships, invest in experiences, invest in knowledge and wisdom. These options never get old.

13. Live a healthy lifestyle. Make good choices.

Again, you are young but you are not invincible. As much as you need to invest in your financial portfolio, you also need to be investing in yourself too. This includes your health and well-being. While you’re still young and strong, start making healthy choices. Give up vices like smoking. Eat more fruits and vegetables. Opt for lean meat. Incorporate more fibre into your diet. Drink more water. Work out regularly. What does this have to do with money? You’re reducing the chances of spending your retirement fund on meds and doctor’s appointments.

12. Exert the effort to learn about budgeting and handling money. Financial education matters.

Let’s face it: we’re not taught financial literacy in school. This is why some people, no matter how highly educated, remain so bad when it comes to handling money. Educating yourself about money then is your responsibility. Read books and even blogs about personal finance. Attend workshops and seminars. Talk to people who know what they’re doing. You don’t even have to spend money to learn financial literacy!

11. Date someone who shares the same values when it comes to finances. Marry an accountability partner.

Here’s another thing you need to face: whether you like it or not, money is a huge part of life. So whether you like it or not, how your partner or husband views and uses money is a pretty big make-or-break factor. If you are on the road to financial freedom and then independence, the last thing you need is a partner who is either a cheapskate or an impulse buyer. Unless they educate themselves about financial literacy, avoid them like the plague.

You see, you are talking about a lifetime partnership here. Whether you like it or not, he’s gonna have a say on how to spend your money. Look for someone who spends after saving, knows the value of retirement and emergency funds, and invests in legal financial vehicles.

10. Never borrow to buy something you can’t afford, but it’s okay to have good debts.

Let’s get this straight: if you can’t afford to pay for something in cash, you can’t afford it. Having a credit card doesn’t mean you can buy what you can’t afford (remember #15?). But there are times when you simply need to borrow money in order to afford something that will benefit you financially. For example, if you have a brilliant idea for a business but don’t have enough money to fund it, you can present the idea to an institution that can finance your venture.

9. Learn how to live so that you wouldn’t have to buy all of your needs. Be self-sufficient.

When you’re in your 20s, financial literacy isn’t the only “subject” that you need to learn. You also need to learn, well, a smorgasbord of lessons on how to be self-sufficient. First, cook so that you don’t have to order out so often. Next, learn how to make your own stuff so you don’t have to buy. Finally, learn how to mend and make repairs so you don’t have to throw out things that you can still use.

8. Not everyone is as well-off as they seem to be. Never compare.

It’s okay if they have a bigger house, a better car, and are able to travel more. Chances are that’s what you’ll see based on their pictures, but pictures never really tell the entire story. They can be broke or buried in debt for all you know. But if they’re truly financially independent, don’t base your progress on them either. You can learn from them but never compare your life to theirs — focus on your own.

7. Take on part-time jobs and side businesses as a student. Be industrious.

Hardworking and diligence are two of the important values that will take you far in life. If you’re still a student, take on part-time jobs (especially in the service industry – you learn a lot about life from the service industry) or come up with small businesses that you can keep on the side. Aside from giving you an on-the-job training about handling money, the experience will teach you gems like humility, a sense of responsibility, and dealing with people from all walks of life.

6. Spoil yourself occasionally — but save up for it. Be patient.

Don’t be a cheapskate; you need to be spoiled once in a while! What’s the use of earning and saving money if you’re miserable? But please remember to not give in to the temptation of borrowing to get something you can’t afford yet. Yes, I’m aware I’ve already mentioned this a number of times, but this can’t be stressed hard enough. Avoid debts and instant gratification, again, like plague.

But do save up for the things you want. This is actually exciting. You can have an envelope or a jar where you save money meant, for example, a trip to Europe or a designer bag. This can be practical or frivolous depending on your taste. The rule is that you should be able to truly afford it (with cash). Take care to not do this too often because it takes away the novelty of “spoiling yourself” and you’ll end up broke.

5. Never give in to get-rich-quick schemes. They never truly work.

There’s a reason why get-rich-quick scams schemes seem too good to be true: it’s because they are. Yes, you’ll probably earn quite a good amount during the first months, but these schemes are never sustainable. Most of the time, they depend on recruitment and the money being handed over by the new recruits (which, most probably, includes you). What happens when there are no longer any new recruits?

PS: Most of the time, get-rich-quick schemes are illegal, too.

4. You are never ever too poor to give. Be generous.

The one problem that many people have regarding handling money is holding onto it for dear life. Yes, it is important to save money. And yes, it is crucial to be ready for the rainy days. But this doesn’t translate to holding on to your money without consideration for the needs of other people. Yes, there is such a thing as social responsibility.

You’re never too poor to give. Ever. If you can spare a couple of dollars to give to a homeless boy, give it. If you can spare a couple of hundred for a struggling neighbour or colleague, give it. If you can donate a couple of thousands to a reputable charity organisation, do it. Be thankful that you are in a situation that allows you to give.

3. There is no harm in saying no. It’s okay to refuse to go, or buy, if you don’t have money for it.

Have you heard? Peer pressure doesn’t end in school. If anything, there may even be more peer pressure in adulthood. Co-workers pressuring you to go clubbing on Friday nights. Relatives pressuring you to go with them on their next trip abroad. Co-parents pressuring you to get this latest baby-raising trend. And you even have to deal with your children’s peer pressures, too. Seriously, it never ends.

But you can say no to these pressures. You have power over peer pressure. It’s okay to refuse and it’s not embarrassing to admit that you don’t have the budget for it. Better to be honest than suffer from buyer’s remorse.

2. You have enough, even more than enough. Be content.

You also need to get rid of this mindset where you’re constantly in need or in want of something. It’s this mindset that causes others to envy the Joneses (who may or may not be broke themselves). It’s this mindset that buries people alive in debt.

You have enough. If you get to eat more than three times a day, have the means of transportation to go to work, have a regular change of clothes, have a roof above your head to protect you from the harsh elements of weather, sleep on a soft bed at night, and are able to send your children to school, you have more than enough. But you’ll never realise how much you have if you always have your neck looking over your neighbour’s fence. Be content.

1. You will eventually get there. Don’t lose hope.

But I know you have dreams – not just dreams for yourself but dreams for your family. It is not bad to have these dreams as long as you have the right intention and motivation (please, not envy). If you are in a rocky place right now, don’t worry. Simply by having the interest to read this, you are already educating yourself about financial literacy. That’s step one for investing in a brighter future.

With the right choices and the right motives, you’ll dig yourself out of your hole in no time. By choosing saving and wise spending over instant gratification, you’re already on the road to financial independence. Don’t lose hope. You’ll eventually get there.

If you could go back in time, what money lessons would you wish to teach your younger self?