What I’d Tell My 20-Year-Old Self About Money

November 20, 2013

In April, J looked back on who he was at the age of 20 and wrote a list of financial advice he would give to that version of himself today. As I was reading his post, I immediately came up with a few things that would have been on my own list – this post has been sitting in my drafts, ever since.

I may only be 28, but looking back at 20-year-old me, I can hardly believe we’re the same person. I was so… unfocused. I cared about nothing but making money, partying and socializing. Good grades? Meh. Good enough was good for me. Today, I’m the girl who is up before 6am to start her crazy, workaholic routine. I’m a perfectionist – scared to submit any piece of work that isn’t up to my ridiculously high standards – and those are just the changes I’ve made in school/my career. As for my finances back then, I’m sure you can imagine what that looked like.

Here’s a list of 10 things I’d tell my 20-year-old self about money:

10. Your credit card is not a second bank account. I don’t know who taught you otherwise, but plastic isn’t a way to fill in the blanks of your budget – it’s a tool to help you build credit. End of discussion.

9. Also, pay off the balance each month! I don’t know why you think you can get away with only making the minimum payment, but one day it’ll catch up with you, and in the meantime you’re going to waste a ton of money on added interest charges.

8. It’s not a sale if you put it on credit and can’t pay it off. So wipe that smirk off your face, whenever you tell people you got something at 50% off the retail price. It’ll probably take you a year to pay for it, which will erase what you “saved” and potentially leave you paying more.

7. Save 10% of your net income – if not more. Dad has been drilling you with this since you got your first paycheque at the age of 15. He’s not just trying to control what you do with your money – he’s honestly trying to teach you how to save, which will help you in your future!

6. Stop taking money out of savings! Seriously, what are you doing!? You’re never going to save a dime, if you continue to take out that money and blow it on stupid things.

5. You don’t need to buy new books all the time. There is such a thing as going to the library, or at least waiting until you’re done reading all of the books you have before buying more.

4. You also don’t need brand new furniture. Sure, it’s nice to look at… but it’s a luxury. You don’t need to design and furnish your dream apartment. You’re 20 and you live in a dump and that’s ok right now.

3. You’re going to waste a ton of money on partying. I don’t think I can stop you from doing this, but I want you to be aware that paying to drink booze results in you literally pissing your money away.

2. Teach yourself how to budget! Please! Do it now, before it’s too late! It’s not a scary, restrictive or boring tool – it’s the best way to picture your financial future, set goals and go after them.

1. One day, you’re going to write a blog about your personal finances – and maybe even inspire a few people to pay closer attention to theirs. You’ll never believe me, but I promise it’s true. And each new post and comment will inspire you to get better and better at it.

What would you tell your 20-year-old self about money?

  • Erica November 20, 2013 at 4:17 am

    Yikes- I think we were the same person at 20..lol.
    Honestly I would tell myself all of these things, maybe not number #3& 4 but it would be exchanged with you’re going to waste money on clothes you don’t need and spend a lot of interest in because of your credit card debt!
    It’s funny, now in my thirties I can understand and see why these details make sense but in my 20s I was very much like fahget about it!!!!
    Great post as always :-)

    • Cait November 21, 2013 at 9:45 am

      Hahaha, ignorance was bliss, eh?

  • Trista November 20, 2013 at 5:02 am

    Some pieces of information for my 20 year self:

    1. Living with your father isn’t so bad. Spend another year or two and actually save the money required to move out on your own. Every move I’ve made except for my last one was facilitated by credit. The worse was probably the cash advances on my credit card to put down a damage deposit.

    2. Having pre-authorized cell phone payments on your credit card does not mean you can forgo paying the phone bill and just pay the credit card minimum payments. I swear I went over a year without making a cell phone payment.

    3. You don’t need $9000 worth of credit when you make $26,000 a year. It’s a recipe for disaster. Keep your limits to a number that can be paid off in a reasonable amount of time if you fall off the wagon.

    4. Don’t touch your savings. Having an RRSP released because it was with your company and you changed jobs does not mean you can spend it. It should go straight in to another plan

    5. Don’t be so shy, talk to your professors and do extremely well in your first time around in university. Get more than a 3.0 GPA and get in to the program you wanted with a much higher income potential. Don’t end up returning to do a secondary program 7 years later after scraping by on jobs where you can hardly make ends meet.

    Thanks for another great post Cait. It certainly made me think about some of the lessons I’ve learned this last few years. My 29th birthday is next month. Let’s hope In my 30s I will be much more financially savvy and I’ll learn to enjoy what I have more.

    • Cait November 21, 2013 at 9:46 am

      Love #5! I wish I’d done that too.

  • FI Pilgrim November 20, 2013 at 5:04 am

    Saving money is what kills me. Why oh why didn’t I save more when I was younger? 0% into my 401k between ages 18 and 24? What was I doing?!

    • Bet Crooks November 20, 2013 at 6:04 am

      Um, going to school? : )

      I’m one of the few who did put money into an RRSP (like a 401K) as soon as I started working after graduation and I can tell you it was a great idea. (I’m closer to retirement than to starting out.)

      • Cait November 21, 2013 at 9:48 am

        I’ve always put a little bit into my RRSP too. It started with $50/m, went up to $100, $200, etc. Next year, I’ll be in the $400-450/m range. Hopefully better late than never!? :S

  • SammieK November 20, 2013 at 6:46 am

    I’d tell my 19 year old self not to move out into a sharehouse when I wasn’t quite ready, as I ended up spending most of my time at my parents house anyway. I moved back in a couple of months later minus about $1200 (my whole savings at the time which was a big deal as I was only working 15 hours a week). We live and we learn lol :)

    • Cait November 21, 2013 at 9:49 am

      I moved out at 18 and was home 6 months later too!

  • MakintheBacon November 20, 2013 at 8:03 am

    I would tell myself:
    It’s ok to switch majors, but maybe you should have chose one that would have given you a higher salary
    Maybe a year off before university or after that first year would have cleared your head.
    You can make time to pick up a part-time job while going to school. Even for just a few hours a week or on weekends. So many students can juggle work and school. Why not you?

    • Cait November 21, 2013 at 9:51 am

      Good point! My dad never let me quit my job in school. “If you want to drive your car, you need gas. If you need gas, you have to work.” I hated him for saying that then, but am so appreciative now.

  • Morgaine November 20, 2013 at 8:30 am

    I actually made most of my really stupid financial mistakes after my mid-20s but here’s the #1 thing I would have told my 20 y/o self: Your student loans are not free money! They are for school and one day you will have to pay them back. Use them for school and school only. If you get more money than you need, save it to pay it back as soon as you graduate.

    I also wish I had applied for grants/scholarships while I was in school and perhaps loan forgiveness when I got out. I was making $22K at my first job and my student loans were $21K. I think if I had lowered this amount before starting to pay, it would have made a huge difference in my later 20s but these are things you learn after the fact.

    Great post!

    • Cait November 21, 2013 at 9:58 am

      I know so many people who did the same thing w/ their student loans. I will smack my brother and sister if I ever hear of them a) getting loans and b) using them for anything that’s not school related. (Are you reading this Baby Bro and Baby Sis? LOL)

  • kat November 20, 2013 at 8:40 am

    stop taking cash out of your graduation money CD (when you have a part-time job and your parents are paying for tuition/room/board) to pay for dinners for your (now ex) boyfriend! he’s the worst anyway. what i would do to have that CD now!

    it’s okay to double major–it probably wouldn’t be that much extra work.

    you’re doing such a good job putting money into your IRA, but you should probably increase your contributions when you get a real job, lazy bones!

    • Cait November 21, 2013 at 9:59 am

      Oh my gosh, did we have the same ex? haha… I paid for way too many dinners out w/ him. Huge mistake! And such a waste.

      • kat November 21, 2013 at 1:30 pm

        SO. MANY. DINNERS. and, to add insult to injury, the time we dated–i had a school meal plan! FAIL x 100.

  • Alicia November 20, 2013 at 8:52 am

    Cait, we just might have been the same person (I’m 28, too… hmm, has your family ever been to the East Coast?) Here are a few of mine.

    1. You do not need your own brand-new vehicle at 20, even if you have the money saved up for it. It will cost your nearly $400/month to run indefinitely, even without car payments.

    2. Even though your employee discount gets you 30% off books doesn’t mean it’s a good deal – it is just a better deal than the average bookworm. And what are you going to do with thousands of pounds of paper when you move on a yearly basis?

    (This one isn’t financial, but definitely something I wish I truly knew, and internalized, in my early-twenties…)

    3. Just because a guy likes you and shows you attention, doesn’t mean you have to like him back. Have more self-respect than to accept any male-attention because that is all you think you deserve.

    • Cait November 21, 2013 at 10:01 am

      Well, my family IS from Southern Ontario… :P

      And #3 is right on the money.

  • Girl Meets Debt November 20, 2013 at 9:28 am

    Such an honest post Cait! I would have told my 20 year old self that student loans are NOT free money and if I don’t use the money wisely and start paying off my student loans when I graduate then one day I will be almost 30 and blogging about my struggles and triumphs with debt ;)

    • Cait November 21, 2013 at 10:02 am

      Now I’m curious: what’s the craziest thing you spent some of your student loan money on? Have you answered that before?

  • Budget and the Beach November 20, 2013 at 10:23 am

    Great list that I think many can borrow from and send to their 20-year-old self. :) I would also say I don’t need to buy a “new” car, that a good used one is fine and you’ll be happy to have saved that money. Also don’t buy CD’s, they will become obsolete. But do travel more. Also start a budget and stick to it. You’ll thank me later. :)

    • Cait November 21, 2013 at 10:02 am

      Add DVDs to that list!

  • Stephanie @ Six Figures Under November 20, 2013 at 11:40 am

    I would say “You’re doing a good job living within your means and living from paycheck to paycheck, but if you would challenge yourself and step up the income a little and start saving you would be much better off in the long run (like when your husband decides to go to law school)!”

    • Cait November 21, 2013 at 10:03 am

      Eek! Yep, great advice. It’s one thing to be living well in the moment, but it’s another to be saving for whatever may come in your future.

  • Jessie's Money November 20, 2013 at 12:18 pm

    I would tell myself not to loan my boyfriend money. If he doesn’t have any – that’s his fault, not yours.

    • Cait November 21, 2013 at 10:04 am

      Totally.

  • Julie Cameron November 20, 2013 at 12:51 pm

    Cait, this is my very favorite post you have ever written. As someone who has known you since you were 13 (holy!) I have been very lucky to be friends with both the 20 money spiller you were and the financially sounds budget diva you are today. I think that this is terrific advice and just another reason you teaching basic finance in school is not only a great goal but something you were born to do! Keep it up!

    • Cait November 21, 2013 at 10:06 am

      Omg, we’re so old! Love you! xo

  • Mo' Money Mo' Houses November 20, 2013 at 4:48 pm

    Aww I love this, I should write something like this too though 20 feels like just yesterday still!

    • Cait November 21, 2013 at 10:07 am

      Does it!? I barely remember 20 anymore, haha.

  • Tara @ Streets Ahead Living November 20, 2013 at 6:42 pm

    Number 8 is so true and something I elaborate even futher—it’s not a sale if you only wear it once!

    • Cait November 21, 2013 at 10:07 am

      Good point!

  • Pira November 20, 2013 at 7:30 pm

    I would say all of the above, and the big one would be not accepting the maximum amount of student loan that was offered to me. I treated it as if it were my own money and spent it all on booze and shopping…and tuition, I guess.

    Credit card is a big one too – I didn’t realize how reckless I was until I applied for a new credit card only to be told I had been late in payments on my last one almost every month without even realizing.

    • Cait November 21, 2013 at 10:08 am

      So many people don’t realize that you can take less student loan money than what they offer you – that’s a great point, Pira.

  • Sara Hamil @ They Call it Gumption November 21, 2013 at 10:26 am

    Love this :)

    I also totally hear you when you say that you feel like you’re a totally different person from your 20-year old self. I’m so embarrassed when I think about how 20-year old me was with money. Ugh…

  • Kevin November 21, 2013 at 7:58 pm

    Great post, I think this should be required for all High School students!

    For me I wish I saved more earlier. Don’t get me wrong, I’m doing great with savings now, but you know how it goes, every year helps when it comes to compound interest!

  • SavvyFinancialLatina November 22, 2013 at 10:15 am

    I would probably tell myself to invest more money in the stock market, even if it meant going to live with my parents during the summer. Well…Idk about going back to live with my parents during the summer. Learn how to cook. Please learn how to cook! Change to engineering! Don’t go to the mall with your roommate!

  • FI Fighter November 24, 2013 at 9:46 pm

    Great post!

    The biggest mistake I made was buying a luxury automobile soon after getting my first job. It came at the worst time too, during the start of the recession. If I could go back, I would tell my younger self to learn about investing asap. Even if you aren’t in the position to invest, at least be aware of it so that when the time does come, you don’t let a golden opportunity pass by.

  • ashly November 25, 2013 at 10:43 pm

    Save, save, save! I love how most of the comments on this comment train say the same thing. If I could go and tell my 20 year old self to open up an RRSP and a Savings Account and take $50 a month–put $25 into each account every month… and then don’t touch the money at all… I believe I would have more in the bank than I do today and feel more responsible the my money knowing what I can accumulate over time even with small amounts.

  • Lisa E. @ Lisa Vs. The Loans November 26, 2013 at 9:37 am

    Using my credit card as another bank account was a huge mistake for me in my college years! Definitely wish my 20 y/o self knew better!

  • Elizabeth December 9, 2013 at 12:08 pm

    I’m only 23 right now, so I’m sure I don’t have the perspective for this and I’ll laugh at myself in seven more years, but honestly I don’t think I was the “typical” 20-year-old—I hoarded my pennies, mooched like my life depended on it (saved a lot that way!), and panic-studied or hunted for extra credit whenever I got a grade lower than about 95%. And I probably stressed myself out way more than I needed to. So my advice for my 20-year-old self, with all the ageless wisdom of an almost-but-not-quite-equally stupid 23-year-old, would probably be:

    It’s good to save money, it’s good to say no to partying and drinking and pointless spending, and it’s good to work hard to get the best grades you can. But seriously: CHILL OUT. You’ll live even if you’re not in a constant state of tension. You don’t have to be perfect, you don’t have to “beat” anybody, and you have a way better support system around you than you realize.

    Just a little commentary from a different perspective.