Top 5 Financial Lessons To Learn During Your 20's

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I grew up with humble means (which is fine and I'm not complaining) but I knew I wanted better for myself. I wanted to travel the world, buy a big house, have the envious corporate job that paid me a ridiculous salary, etc. I was a dreamer was on the rise and no one could stop me! All of that is still okay (to a point), but it is incredibly important to live within your means and learn basic money management skills. 

Don't Make Emotional Purchases 

Broke up with boyfriend and just had to get that new shirt? Your colleague got your position that you just knew that you were going to get so you go out with the girls for drinks and buy everyone a round of drinks? Horrible idea chica!

I completely get why you would want to do it and have been there myself so no judgment. However, it's time to start dealing with the actual feeling otherwise you can spiral down into some serious financial debt. An awesome personal finance blogger, Ruth Soukup has a powerful story of emotional spending and how it almost wrecked her life! It was incredibly inspiring how she got out of that mindset that inspired me to get on that journey as well!

Don't Try to Keep Up with the Jones...They're Broke Too

Earlier, I talked about my desires to have (what I thought was) the great life! A fancy job with a big title, cool apartment in a big city and a cool car (just to let everyone know I can hang with the cool kids too). That consumerist mentality has caused me to stumble upon a massive amount of debt. This is a horrible way to go about life! A recent study has shown that the average debt is $90,000! Come on America, we can do better than that!

Not Picking Paycheck Over Passion

When I was in college, I had this hyper-focused mindset about creating a better life for myself; having a stable income that made a lot of money and allows me to do the things in life that I was always passionate about. So, of course, I chose a major that typically leads to a job that makes a lot of money. Not only is it a horrible idea from a moral standpoint, but I wasn't even good at it. It eventually leads to a mountain of debt ($70,000 in student loans...gulp) and a miserable time in my 20's from a career standpoint that trickled into my personal life that eventually leads to a costly and painful divorce.

In reflecting on my failures, I had it all backward! I needed to do the things that I am passionate about in the work that I do that will make great money. Not go for a job that you hate in order to make great money so that you can have the money to do what you're passionate about. I've come to find (the hard way) that passion is the driving force that is going to keep a person going when the work gets hard (and believe me it will get hard). That is what will make you successful and avoid the horrible issues that come from being in the wrong job for you. So basically, not only could it cost you thousands of dollars in unfruitful education, but job instability.

Breaking Up With Plastic 

According to an article in Nerd Wallet, the average money in interest alone that is spent in a given year is over $2,500. That's a little over $200 a month in interest for CREDIT CARDS ALONE!!! Just think about combining that interest that is paid with student loans, house payments, etc. They mentioned the total interest payments on an annual basis is $6,658 or $554.83 a month! Please do not make this mistake. If you did (or currently doing it) it's okay, there are ways that you can get rid of it. I know this awesome Personal Finance Blogger, Kristin that created an Epic List of Side Hustles that has made her and some really good friends of hers great money! Take a look at it, it's actually really creative.

Having an Emergency Savings

As mentioned previously, I got a divorce a couple of years ago and was broke! About a month after I got a divorce, my paid for college car broke down on me (of course, when it rains it pours) and I had zero dollars in emergency savings. At the time, I had pretty decent credit and financed a newer car. Now, I'm not saying that getting a newer car is bad but if it only takes $200-$300 to fix your car then you should not get another car (especially if you have a mountain of student loan debt...gulp). Now if I were to have that $200-$300, just think I could have saved myself a couple of thousand dollars in the interest alone.

 

Conclusion 

If you have made any of these mistakes (or currently making them), I'm not condemning or judging you (believe me I'm the last person in the world that needs to judge anyone). I just want you to know there is light at the end of the tunnel and you can turn it around. Let me know if any of you have made any mistakes like this, if so how did you change it or wanting to change it!? You never know, someone else could be struggling with the same thing that you are right now! You never know!