Anyway, it got me thinking about some of my financial mistakes in my 20s, some of which I’m still, kinda literally, paying for. The good thing is, it’s never too late to learn from your mistakes and correct your financial path. But the wallop I took from the these top three (or worst three?) missteps still smarts:
- Retirement Contributions: You know where I stand on this one. When you fail to participate in an employer 401k plan you’re 100% giving away free money … and comfort in your retirement. I screwed this up for the first few years of my career, and while I corrected myself, there is truly no physical way to make up for that lost cash and compounded interest. Every time I compare my retirement account to George’s—who began contributing right away—I get a little jelly belly. (Uh, jelly belly = jealous? Cool, huh?)
- Living Up To My Paycheck: My first salary was nothing to write home about, but I could make ends meet and had a small stack of cash for discretionary spending. Yet when I got my first little cost of living increase (and my rent and other expenses stayed stable) the only change I made to my budget was a bad one. Whereas I shoulda put that extra money into my emergency savings fund, I sunk it into stuff like mozzarella sticks. And mozzarella squares. And mozzarella triangles. I have to give huge credit to one of my girlfriends who pulled me aside in the office one day when I was about 26 and forced me to set up a savings account with then ING. It truly kick-started my savings plan … and I’ve contributed to that account ever since.
- Not Tallying My Spending or Budgeting: As has become pretty clear from the above examples, I kinda just spent Willy Nilly in my 20s. I never over drafted my account or anything, but nor could I tell you what my money went towards, aside from a couple pieces of furniture for my first place or a few trips abroad. And those mozzarella sticks. It was when I started tracking my spending in my 30s that I truly got a better sense of my current financial situation, my hopes for my future financial situation, and the steps I needed to take to bridge the two. It’s true that there’s an “ignorance is bliss” aspect to the sort of laissez faire attitude I had in my 20s, but darnit, I just wish I’d paid better attention and spent more strategically, even if it wasn’t as fun in the moment.
So these, little brother Cletus, are mistakes that I hope you learn from. I’m still learning from them myself, and am pondering what mistakes I’ve already made in my 30s that I’ll be learning from in my 40s. I have a sneaking suspicion it will involve not spending enough on wrinkle cream. And eating too many mozzarella sticks.
What financial lessons do you wish you could teach your younger self?