Money Mistakes I Made in My 20s — And How I’m Fixing Them Before 30.

In my early 20s, money felt like something I’d “figure out later.” Budgeting, investing, and tax planning. That sounded like something for future me. But over the years, through reading personal finance books, learning from people in the field, and making more than a few money mistakes, I realized how important it is to take control early.

You don’t need a finance degree or a job in a related field to build wealth. What you do need is awareness, discipline, and a few smart strategies.

Here are the lessons I wish I had known a decade earlier, habits that would’ve saved me time, stress, and a whole lot of money.

 

1. Always Pay Yourself First

This idea changed my life. Most people get paid, spend on bills, subscriptions, fun nights out, and save whatever’s left (usually nothing). This is called paying yourself last, and it’s a fast track to staying broke.

The alternative? Pay yourself first. The moment your paycheck lands, set aside at least 10% as if it were a non-negotiable bill. This simple habit builds savings, creates financial discipline, and puts you in control.

“But my paycheck isn’t enough to pay myself first…”
That’s exactly why you need to. If you wait until everything else is paid before saving, there will never be anything left. Start with even 5% it’s not about the amount, it’s about building the habit. Paying yourself first forces you to treat saving like a non-negotiable bill. And just like with any bill, you find a way to cover it.

“Do not save what is left after spending, but spend what is left after saving.” – Warren Buffett.

 

2. Avoid the Trap of Bad Debt

Buying what you can’t afford on credit might feel harmless, but it adds up fast. Credit card debt, in particular, can spiral quickly due to high interest rates (some as high as 22%).

If you can’t buy it in full, you probably shouldn’t buy it at all. Debt can be a tool, but when misused, it’s an anchor.

 

3. Build a Buffer Before Anything Else

Your first financial goal should be an emergency fund, a buffer of at least 3–6 months’ expenses. This isn’t optional. It’s what shields you from unexpected life hits like losing your job or facing medical expenses without falling into debt.

Start small. That 10% you save from each paycheck? That’s how you build this cushion. 

 

4. Know Your Numbers

Want to stop feeling like your money disappears? Track it. Knowing your exact income, expenses, assets, and liabilities changes the game. It’s your starting point for financial control.

Also beware of lifestyle inflation as you earn more, you’ll feel the urge to spend more. Fight that instinct. Wealth comes not from what you make, but what you keep.

 

5. Ditch Expensive Habits

Many of us don’t realize our hobbies are draining our wallets. Whether it’s constant shopping, luxury dining, or frequent upgrades you might be bleeding cash for momentary pleasures.

Instead, ask: Is this expense adding value long-term or just a quick dopamine hit?

 

6. Saving Alone Isn’t Enough

Cutting costs is great, but there’s a limit to how much you can save. On the flip side, there’s no ceiling to how much you can earn. You need both: save smarter and earn more.

Think:

• Side hustles

• Investing in skills that raise your earning power

• Passive income streams

 

7. Understand Taxes Like, Really Understand Them

Taxes will be one of your biggest lifelong expenses, yet most people know shockingly little about them. Wealthy individuals don’t just earn more, they strategically reduce taxes using legal frameworks, smart investments, and advisors.

Start small: use tax-efficient accounts (like ISAs or Roth IRAs), understand tax brackets, and consider the long-term implications of your income sources.

 

8. Don’t Wait to Invest

There’s always a reason to put off investing too risky, not enough money, or no idea where to start. But here’s the truth: the longer you wait, the harder it becomes to build wealth.

Start early, even if it’s with a small amount.
Investing just $100 into diversified stocks, ETFs, or mutual funds is a solid beginning. Let your money grow while you sleep.

“The best time to plant a tree was 20 years ago. The second-best time is now.” – Chinese Proverb

 

9. Don’t Ignore Inflation

Leaving all your money in a bank account is not “playing it safe” it’s losing value quietly. Inflation eats away at your purchasing power every year. That’s why your money must work harder than inflation, through smart investing and asset growth.

Diversify: mix safer investments like bonds with growth options like stocks or even commodities (like gold or oil) to weather all economic conditions.

 

On Final Thoughts 

Managing your finances before 30 isn’t about cutting out coffee or hoarding cash; it’s about building habits, systems, and mindsets that let you thrive in your 30s, 40s, and beyond.

If I could go back, I’d do all of this sooner. But it’s never too late, and if you’re reading this, you’re already ahead.