"Biggest Mistake Of My Life" — People Are Sharing The Financial Decisions They Made In Their 20's That Ended Up Costing Them Big Time In The Long Run
Money mistakes are pretty common in your twenties. No matter who you are, you can probably look back on that time and think of at least one financial decision that makes you go, "Oooh, not my best work."
I know I can.
But that doesn't mean we can't save others from having to do the same! So, I asked members of the BuzzFeed Community to share the biggest financial mistakes they made in their twenties and any advice they have to share. Here's what they had to say:
Note: Not all submissions are from the BuzzFeed Community. Some are from this Reddit thread and this Reddit thread.
1."I got my first credit card at 20 and was pretty on top of it. I only ever used it when I had the money to pay it off right away. But then, a few years later, the boyfriend I was living with started using my card without my permission on our shared devices (Xbox, computer, etc.) where I had the information programmed in. He justified it to me that you're supposed to use it when you don't have money and then pay it back once you do, that that was the point of credit cards."
"I know now that he was just trying to make excuses to use my card and money when he was refusing to get a job, but at the time I took his word for it...and then I got caught in this cycle of using my credit cards for EVERYTHING. Plural, as I had multiple cards. I'm in my 30's now and making minimum payments every month that equal my rent in an attempt still to pay them off while rarely using credit anymore to prevent myself from falling back into the cycle."
2."I was fortunate growing up that I lived with my parents until I graduated and got a job, and so up until I was 24, they still gave me an allowance and paid for everything. Awesome! Except…it wasn’t. When I moved out, I had ZERO money knowledge. I ended up maxing out my overdraft regularly, missing bills, getting bad deals on utilities, etc. I had no concept of money management, and ended up in awful debt. Luckily, I’ve been able to fix that now and am actually okay with money for the most part. But yeah, if you are able to, try to learn about the realities of money before you have no choice!"
"Try to learn about essential, everyday financial stuff early on — budgeting, shopping around for best deals, credit scores, etc. Do this *before* you’re on your own and thrown to the wolves."
3."I went to grad school. Biggest mistake of my life. Six figures in debt and instead of having a job that I actually enjoy, I'm forced to take one that I hate but pays the student loan bills. I'd suggest working in the field for a while and seeing what your 'dream job' actually consists of before going for the graduate degree it requires."
—Anonymous
4."I moved out before my 20’s and continued living on my own, with roommates, with a boyfriend, all because I wanted to be independent and live in a cool apartment. I wish I could go back and stay in my parents' home that I was lucky to have been offered without having to pay rent or food or anything (not everyone has this privilege, and I can see how this may not be realistic for many young people). I have spent over $50,000 move to move, living off savings, just to prove independence. If I would have taken the kind of opportunity my parents had given me (and sucked up my ego) I would have saved between $50K–80K from ages 18–25. Lesson: should you have this luck and privilege from your loving parents: Drop your ego and take it."
5."Not moving my savings from the low-interest bank savings account that my parents got me when I was a kid to a high-yield savings account. You need compounding interest over time, and the banks' savings account rates don’t keep up with inflation."
—Anonymous
6."Buying a house when we did. We bought our first house in 2018 and honestly, it was a great experience. We even made a $50,000 profit after only four years of living there. Then, in 2022, we were offered an 'amazing' deal on a bigger house for our growing family. It was a new build and we were told it would be done June of that year. Our realtor told us to sell our house in June and to just wait for the 'finishing touches.' We were homeless basically until October of that year. Us and our two kids had to stay in Airbnb's all summer, when the monthly rate seemed to be skyrocketing."
"It cost us $3,000 a month to stay in the Airbnb we did. On top of it all, the builders took so long that the lender refused to lock in our rate any longer and we lost a 4% rate and ended up landing around 7%. Moral of the story...maybe don't buy a house right now, until the market gets better."
7."Not having long term savings, or very little. I was living abroad and then moved back home and was completely broke for months. Other people were saving for home deposits and I was like, 'I can't even claim unemployment because I haven't been a resident long enough.' Eventually I got a job again and got myself sorted with some financial security. Saying that, I also don't regret traveling. Just glad I didn't do it forever."
8."Getting a DUI — between all the fines, lawyer fees, Ubers, and license restoration fees, those signs on the road really are right: You can’t afford it."
9."Fortunately I realized my mistake quickly enough to correct, but: When you budget, make sure you build in some leeway — a little money you haven’t spent at the end of the month. If you really don’t use it in a given month, you can save it or use it for something fun. But there is often something unexpected that comes up each month — a car repair, damage to clothing that requires replacement, etc. — and if you’ve budgeted down to the cent, you’ll be struggling even if you’ve stuck to your budget. Until you have a decent emergency fund, make sure you have that space available in your monthly budget!"
10."Enrolling in a PhD — years of lost income to go into an occupation that paid really poorly at the time (medical research) that I eventually left anyway. Dumb, dumb idea. I know they say education is never a waste of money, but they lie."
11."Paying for my husband’s second degree and all of our living expenses while he was in school. He left me a week before my 30th birthday for his 23 year old classmate."
12."Staying in my job for nearly eight years. I put my head down, worked hard to master my role, complete all my certifications and complete my master's (while working full time). I was super naive thinking that management/the company would reward me for this and when I woke up, I realized new undergrads were getting paid the same as I was. I handed in my two weeks and never looked back. Still a ton of lost earnings though."
13."By far the biggest financial 'mistake' was spending my house deposit on a year of world travel. During the time I was away, the housing market sky-rocketed and I would've made impressive gains if I had bought a house instead. Although it was the worst financial decision, it was the best life decision and I would do it again in a heartbeat. Not everything in life is about good financial decisions."
14."I quit a job and moved without having another job lined up. It was in 2002 when the tech jobs were collapsing, and I spent eight months un-and-underemployed in my new city. I didn't rack up credit card debt on fun things. I ran it up paying for food and utilities because my various piecemeal jobs barely paid rent and the minimum payment on the card. When I finally did get a full time job, it was at $10K less than what I was earning before I moved, and my rent in the new city was double what I was paying."
15."I spent over $120K on a psychology BA from a private liberal university because I somehow did not understand that I had to pay FAFSA back. I knew I had to pay the personal loans back, but thought the federal loans were free money. It was a mega stressful time in my life, so I probably wasn't thinking clearly..."
"Also, it turns out that the school you pick is a lot less important than how hard you work. I should have swallowed my pride and gone to community college or a state school."
16."I didn’t get a credit card until my late 20's because everyone said I’d end up maxing it out and having to pay it off for years. Yes, it’s very tempting to spend a lot of money with your credit card, but without it, it’s way harder to build a credit score, and you need that for a lot of things. So, my advice is get a credit card early, but, be very mindful of how you use it. Don’t max it out, make sure you can pay off what you put on it, read up on the interest rates, rewards, etc."
"The part about it that was bad for me is that the age of my credit is low, so, it reflects negatively on my credit score. I make all on-time payments, and my usage isn’t terrible, but my score could be higher if I’d opened it up earlier. Building a good credit score is important for things like loans, renting, etc. Credit cards aren’t worth it if you don’t use them, so do use them, but only spend what you can actually afford to pay off."
17.And lastly, "I'm sure you'll get this one a lot from millennials, but student loans. I know it's almost impossible to get an education without loans these days, but try to avoid them if you can or take out as little as possible. Go to community college for your gen-ed's, get scholarships if you can, and/or go part-time if you can. Take a gap year to really think about what you want to get a degree in. Just don't jump right in with the student loans immediately after high school."
—Anonymous
