• Marie

6 Money Mistakes I Made in My 20s

Updated: Aug 25, 2020

Listen up younger Millennials and Gen Z. It's a crazy world out there, and you guys are on the front lines. Thank you. Seriously, thank you! You don't get enough credit for putting your idealism into action. You are the next generation that can effect change to the world. So, if there is one gift this elder Millennial can give back to you, it's the lessons I have learned from making a ton of money mistakes in my 20s. If I had known then that it is completely possible to #LiveYourBestLife and build wealth for your future, I would be leaps and bounds ahead of where I am today. "How" you may say? Well let me show you through the six things I would do differently with my money in my 20s:

1. I would have learned what the heck a 401K/IRA is and how to use it.

I affectionately refer to myself as "Little Miss 401K" now, but that’s only because I started contributing to it when I was 31 years old. In just six short years, I have built a multi-six-figure portfolio. Not bad for someone who didn’t know how to invest when my first employer retirement account was offered to me in 2009.

If I could go back to 2007 after I graduated college, I would have at least opened an IRA (I didn’t become eligible for my company’s 401K until 2009), and I would have maxed it out, which back then was only $4,000. That means I would have contributed $333/month, or $166/paycheck, to funding my future. And that $4,000 would have been tax deductible, which meant my tax refunds would have been even bigger (hello vacation fund!).

If you’ve been following us for any amount of time, then you know how much we love index funds. So, assuming I knew then what I know now, I would have invested that $4,000 in a total stock market index fund. If I had done that starting in September 2007, when I started working at my first “big girl job,” then today I would have $9,882.28 (worth $7,948.60 when adjusted for inflation).

But instead, I decided to sign an apartment lease by myself, and spend $1,300/mo on a brand new apartment.

Which brings me to #2:

2. I would have gotten a roommate.

At that time, I was working for a think tank in Washington, D.C., and I was making $36,000/year (~$27K/year after taxes). And of course none of that was going to savings or retirement.

Now, let’s do the math, $27,000 divided by 24 (I got paid twice a month) is $1,125/paycheck. And my apartment was $1,300/mo. That means my rent was 57.7% of my take home pay. And I had student loans. And utilities. And groceries. And a cell phone bill. And so on and so on.

And I wasn’t budgeting or tracking my expenses, so I was almost always under water each month.

Eventually I realized this was not sustainable, so I got out of my lease, moved to a suburb of D.C. that was still on the Metro red line, and moved in with a roommate. My rent went from $1,300/mo to $725/mo (55% of my previous rent and only 32% of my take home pay).

So with all this extra money, I started contributing to my retirement savings and got on the path to Financial Independence!


No...all that extra money went out the window. I literally couldn’t even tell you what I spent it on. I do remember going crazy buying smelly lotion and body spray from Victoria’s Secret shortly after I moved.

This brings me to #3:

3. I would have budgeted and bucketed.

I’m going to be honest, I have never liked budgeting. Expenses change every month, and I’ve never been good at saying you have $X for this category and you can’t go over it. No one spends like that...at least no one I know.

But I do like tracking my expenses (because I want to know I’m spending based on my needs and my values), and using systems to help me meet my financial goals. I now use a “bucket system” with my bank accounts where everything comes out of one of three accounts (buckets): savings, bills, and expenses. I’ll talk more about my system in another post. But for now, my recommendation is to find an expense tracking system that works for you.

I personally love Personal Capital, while Stephanie is a Mint girl. I also use an app called Clarity.

4. I would have paid myself first.

I did eventually learn to pay myself first, but even then I made some mistakes. By 2011, I was living in Arlington, VA with another roommate, making 48% more annually than in my first post-college job. While I was still not contributing to a retirement account or investing my money, I built up an impressive savings account all while going out to lots of bars and restaurants, wine and beer festivals, concerts, and trips to France and Mexico.

The savings was just sitting in my bank account, not earning any interest or growing in any meaningful way. I could have been growing wealth while simultaneously having all of these amazing experiences.

Instead, I bought a car.

5. I wouldn’t have bought stupid stuff.

I was 29 years old and I thought I needed to keep leveling up my life. So I bought an (used) Audi A4 convertible in cash. 🤦🏽‍♀️

The fact that I paid cash for it, and did not throw away even more money by paying interest on an auto loan, was probably the only smart decision I did make with this car.

I not only put my entire life’s savings into a depreciating asset, but this car turned out to be a major lemon. The transmission was crap, to put it mildly, and completely broke down on the highway TWICE (once on the way to Stephanie’s house for Thanksgiving!).

$12,000 completely down the drain.

I was able to sell the car for about half of what I paid for it. About a year after that, there was a class action lawsuit for the transmission, and I was able to recoup the $1,500 I spent on repairs over the short amount of time I had the car.

Still, had I invested half of that money -- and bought a sensible car with the other $6,000 -- today I would have $10,487.82 ($8,390.04 adjusted for inflation).

6. I would have forgiven myself for my past money mistakes

If I'm being honest, I'm still working on this one. Crunching these numbers has been illuminating for me. I could have had so much more wealth, and it’s hard to accept that I squandered it. But the reality is, I didn’t know any of this when I was in my 20s. I assumed wealth was for wealthy people. I didn’t know I could be a wealthy person.

Beating myself up over what could have been isn’t helpful. Wallowing in your past mistakes prevents you from taking action.

As Dr. Maya Angelou said, when you know better, you do better. And now that I know better, I have made up for lost time while making impressive gains.

Now, Stephanie and I are using the knowledge we’ve learned over the past five years to help other people, especially young people, women, and people of color, structure their finances, grow wealth, and build a life around their dreams -- not their bills.

So to our younger followers, go out and live your best life. Make a few mistakes, but also, make time to learn about your finances early on. It is the best decision you will ever make.

Want to continue the conversation? Join us Wednesday at 8 pm ET on Instagram Live @Winenance for Winenance Wednesday. Can't make it? Watch the replay onIGTV - #WinenanceWednesday. Cheers!

Need help tracking expenses and building your wealth? We’re big fans of these apps and tools:

Disclosure: some of the links above are affiliate links, meaning, at no additional cost to you, we may earn a commission if you click through and sign up to use these tools.


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