Avoiding These 5 Common Money Mistakes in Your 20’s Could Make You Much Wealthier

Could your personal financing use some fine-tuning?

Photo by Sharon McCutcheon on Unsplash

I wonder. What would my life look like had I known at 18 what I know now about personal finance? I’ve often tried to play through calculations in my head.

It’s quite inconceivable — the opportunity we have at 18 to start building wealth. Being so young yet having such crucial decisions in front of us.

I would have done many things differently. And, now, I want to pass that knowledge on to the generation behind me. Just like I wish someone had done for me.

Here are 5 common money mistakes you can avoid:

Rushing to buy a home

Sure, buying a house makes sense. Wouldn’t you rather put money toward something you’ll own rather than rent? That seems to be the narrative, anyway.

Still, taking on debt should always be a serious consideration. A mortgage is a huge financial responsibility. We leverage that fact with it being one of the most common types of debt society accepts. So, it makes us feel better.

The fact of the matter is, debt is still debt. If you’re not financially stable and ready to pay-down a mortgage month after month, perhaps it’s the wrong time to buy a home. What’s the rush anyway?

I would argue that diversifying into other time-sensitive assets that can compound is a much smarter move. Such as the stock market and crypto markets are a much more advisable move in your twenties.

Going to college unnecessarily

I’ve already expressed my opinion on this topic before. I think college was my biggest financial mistake to-date. My point is — the world is changing. Proper education isn’t always that proper. Many times, we can educate ourselves just as well as a large institution.

If your chosen degree field doesn’t require technical education, perhaps think twice about going into student debt for a degree you may never use (like me).

Instead, I wish I worked a few years after high school. Even working my old high school job for a few more years would have put some sweet money in my pocket. Plus, it would have given me time to contemplate what I want and get me started in investing earlier.

They say hindsight is 20/20 and I can’t regret my choices. Well, here I am in regret. Instead, use my hindsight and many others and really think about whether college is right for you.

Not saving for retirement

I didn’t make my first contribution into a retirement account until I was 24-years-old. Some people may consider that early. From what I’ve learned about the power of compound interest, I wish I would’ve started adding to the account five years prior.

Again, hindsight is 20/20. But if someone would have guided me in the direction of investing in my retirement at 20, I could have been heaps and bounds ahead of where I am now. For all those thinking it’s too early to start saving for retirement — it’s not.

If anything, now is the time to invest heavily for retirement. When you’re young and can afford the risk.

Taking on debt

Taking on debt isn’t always a bad decision. For example, debt on a mortgage can pay off — especially if you plan to rent out the real estate. However, there is also very bad debt.

For example, one area of debt I can’t (for the life of me) understand; car payments.

Why would anyone buy a new car? It’s one of the most deflationary assets out there and, still, everyone wants faster, bigger, newer.

Generally speaking, if your debt isn’t making you money, it’s working against you. If you don’t understand how debt can make you money, perhaps you’re not ready to take on any kind of debt.

First, you can learn about debt and the power it can yield. Once you have a better understanding, then you can use it advantageously. But, until then, debt could be a shortcut to financial ruin.

Failing to plan

Financial planning is hardly something you can cross of a to-do list. The older I get, the more I realize its a never-ending duty. Of course, some financial strategies are more passive in nature, but you must solidify your plan before coming to that conclusion.

The important thing from the beginning is to be deliberate with your actions. Know how to build wealth and have a plan for how to achieve those steps. It won’t happen overnight and your plan will be forever changing.

Still, it’s important to have a plan in mind.


Don’t get caught in a game of catch-up. Instead, you have an unbelievable opportunity to put yourself ahead if you educate yourself about the possibilities. Don’t follow the conventional route because it is not for everyone.


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** This article was originally published at www.adamcheshier.com **


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