7 tough money lessons I learned in my 20’s

woman opens empty wallet, credit cards on the table

If someone had told me ten years ago that it would take a decade for me to get my financial house in order, I wouldn’t have believed it. And quite frankly, I don’t know if I would have kept hustling knowing I’d be broke until my 30’s. I accrued quite a bit of debt in my 20’s that took me years to pay off.

We live in a culture where debt is encouraged. Whether you’re accruing it to pay for an education or getting a car loan, we’re told there is “good debt” that will pay off in the long run. For a 20 year-old lacking the knowledge to really contextualize this advice, it resulted in a mountain of debt that took almost ten years to pay off.

Part of it was because I graduated in the midst of a recession and took a low paying job out of college. But I also made a lot of mistakes along the way that kept me broke. When the geniuses of the world eventually get around to inventing that long-fabled time machine, here are seven  lessons I would share with my 20 year-old self about money:

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Don’t make decisions based on fear

So many of my early career choices were made based on fear: I was afraid I wouldn’t find another job so I took a low-paying one that made me unhappy. I was afraid of leaving my job and when I found another one, I was afraid to push for the salary I wanted because I didn’t want to lose out on the opportunity.

If I could tell my younger self one invaluable lesson, it would be not to do anything based on fear.  Fear is the enemy of progress and a surefire way to lose out on the greatest things in life.

Don’t take less money than you’re worth because the economy is bad and you’re desperate for a job

One of my biggest career mistakes was the first job I took out of college. After being unemployed for about seven months after graduation, I took the only job offer I had. I wasn’t particularly interested in the field or the 3-hour round-trip commute. The salary was also absurdly low.

I took the job, thinking I would do it for a year until something else came along. But it took up up so much of my energy that I was too drained to look for another job. I ended up spending three years at a job that made me miserable and destroyed my morale. From a supervisor who began openly bullying me to the harassment I endured from another department head, it took a toll on me.

Finally, I hit my limit and submitted my two-week notice. I spent those two weeks terrified of my looming unemployment. But then another job opportunity presented itself as I put out the word that I was leaving my job. I ended up in a much happier place, working remotely and getting paid almost 50% more than my previous job.

This isn’t a one-off occurrence either. Over the last decade, I’ve discovered the importance of leaving toxic situations in order to focus my energy on more productive ventures. Doing so has helped me thrive. And even when I’ve left roles with no plans for where I’d end up, the healthier mental state gave me the clarity to create other opportunities.

By knowing my worth, I was able to parlay those opportunities into fulfilling careers. There are no guarantees, but I would tell my younger self (or anyone) to know her worth and don’t settle for less. Your energy is too precious for you to spend it doing something that makes you miserable.

Embrace your side hustles – they will ensure a brighter future than any job

I’ve had various side hustles before side hustles were a thing. When I was in college, I worked multiple jobs and picked up gigs like distributing flyers or taking fan photos at sporting events. I even bought reusable tote bags in bulk and sold them for extra cash. These side hustles kept me afloat during the recession and helped me pay down my student debt faster.

But ultimately, hustling for myself also lead to a brighter future and better opportunities than any job I’ve ever had. Your employer won’t always appreciate your hard work or reward you for it. You can spend years toiling away in the same position, hoping to be recognized and even advocate for yourself to no avail. In my case, my side hustles ended up being more beneficial than any office job I’ve ever had.

It’s how I got out of my low-paying post-grad job and into a management role doing something I’d always dreamed of. It’s how I was able to generate a 5-figure side business working evenings and some weekends. Ultimately, it’s also what  got me a higher paying position that I would have never received had I not proved myself to be a self-starter. Yes, having a side hustle worked out better for me than the 8+ hours a day I spent toiling away in a cubicle.

Don’t deprive yourself when you’re working so hard

While I’m all for financial minimalism these days, I do think it’s important to have enough to cover your essentials. When you’re working hard (or at least working a job that makes you miserable), you want something to show for it. You want to be able to have a frappuccino every once in a while without worrying about Suze Orman’s judgment or overdrawing your bank account.

I spent too many years  depriving myself in order to meet my financial goals (mainly, paying off my student loans). It didn’t put me in a substantially better financial position and hurt my morale. You need to experience the fruit of your labor. Depriving yourself of the occasional treat is not the way to achieve this or  financial independency.

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Don’t spend less – earn more

After graduating from college, I made very little money. At the end of the month, I had maybe $100 left to spare and I’d often put that towards paying off student loans. I ended up completely miserable, working all the time and having nothing to show for it. Then I came across some life-changing advice on one of those motivational blogs: Don’t spend less money, earn more of it.

By aiming to earn more, I empowered myself to advocate for a higher salary and pursue other income opportunities that ultimately put me in a financially secure position. Earning more doesn’t have to mean working more – it means working smart, not hard.

Saving money with purpose will make saving less painful

A few years ago, I was finally on solid financial ground. I had a full-time job and a side hustle that earned a substantial income. I was earning over $10,000 per month and for the first time, felt financially free. After a while, that euphoria wore off. The only way I felt like I had money was to spend it. So I did. I’d spend hours on Amazon, buying highly-rated products that never lived up to their hype and that feeling of security was gone.

Sure, saving money is a good idea but without a goal, it’s harder to do it consistently. Having experienced the real estate downturn of 2008, I wasn’t in a rush to save up for a home. I definitely wasn’t in the market for a new car or any other big purchases. I knew nothing about investing, having cashed out my 401k to pay off my student loans. But I wish I’d  researched investment options more and made an effort to save money and fund a retirement account.

It’s never too late to start forming better habits and I’m much more savvy now, I wish I’d set a goal back then. Even for a  random savings target. I would have a much larger nest egg to fall back on today.

Don’t put financial health above your mental health

The most life-changing moment for me was traveling when I wasn’t exactly in the best financial position. Having deprived myself on a daily basis, I took a two-week trip abroad with just $200 in my pocket. On my paper, I  really shouldn’t have gone and felt a lot of anxiety. But that trip got me out of a depression and helped me overcome my anxiety. When you’re anxious, you feel constant fear. The world seems much bigger and scarier, everything seems impossible.

But when you get out there, those notions are completely debunked. I’m not saying to pack up your stuff and travel abroad (it’s not possible in this climate anyway). But if you’re feeling anxious or depressed, get out of your environment. Take a trip outside of your comfort zone – even if it’s an hour drive. Do things your mind tells you are impossible – prove yourself wrong.

Ultimately, that trip gave me the confidence to leave my miserable job and move on to greener pastures. If I had waited for a financially prudent time to take that trip, I would still be toiling away at the same job 10 years on. Underpaid and unhappy.

Final thoughts

Ultimately, you should live life without regrets. And while I can’t go back in time and share this wisdom with my younger self, I do hope these money lessons are useful for those of you reading this right now. Whether you’re just starting out or have a long career in your chosen field, it’s never too late to change course if you’re unhappy or not living up to your potential.

If you’re struggling financially, it doesn’t have to be that way forever. If you feel stuck in an  unfulfilling job, there is a way out. Hopefully the money lessons I’ve learned in my 20’s can help you end up in a much better place professionally and financially.

What are some money lessons you’d impart on your younger self?

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