I make no secret of the fact I made a mess of my finances when I was in my twenties. That’s part of the reason I started this blog; to share the knowledge that I gained, so others don’t have to learn the hard way like I did. But what exactly went wrong for me? Here, I open up about my biggest financial mistakes.
I want to start by admitting that I’ve been stupid. In fact, putting this down into a single blog post is quite embarrassing. Ten years is a long period of time and I wasn’t carrying out all of these financial mistakes simultaneously. These things also happened at different points during the decade. But I was making these errors and I like to think I’ve now learnt from them.
So let’s take a look at where the decade began…
The university years – normalising credit and finance
To work out where it went wrong, I think we have to rewind back to university. I was 19 (after spending my GAP year working as a housekeeper in Canada). When I started uni I was out for a good time and my oh my, I had one. I partied a lot throughout that period and although I had sporadic part-time jobs to fund my lifestyle, my student loan, overdraft and credit card took a battering.
My university years were generally brilliant. I made some lifelong friends there and I also, by some miracle, came out with a decent degree. As so many great people and experiences sprouted from that period, I don’t regret it. But I’d be lying if I said that coming out of university with a £1,500 overdraft, a maxed out credit card and a massive student loan helped matters.
I was starting working life, aged 22, with debt hanging over me from the off. Building up debt through partying and frivolous spending at university, wasn’t, however, my biggest financial mistake, it was just one of many!
Feeling entitled – spending cash I didn’t have
I spent my university years having the time of my life, on credit. So when full-time work came along, it was a shock to the system. Not because I was scared of hard work, but because I expected to be able to treat myself (a lot), because I was working hard. Working hard is something that most of us spend a lifetime doing. And not for treats. But for a roof over our heads, clothes on our backs and food in the fridge. It’s called life, but it took me a while to realise it.
Yes, I was pretty entitled in my early-mid twenties. Looking back, I think I thought I was in Sex And The City or something. But we all know that Carrie couldn’t actually afford Manolo by writing one magazine column per week. Just like Claire couldn’t afford six holiday each year (I know, I know), working in digital marketing.
I mean I wasn’t badly paid (thank goodness), so I did have the means the pay back all the stupid debt I’d build up. But that feeling of ‘I work, I deserve’, did not help matters and I class it as one of the biggest financial mistakes of my twenties.
Never saying ‘no’ when it came to money
As a self-confessed extrovert, I enjoy socialising and being around people. That means that I often took up any invitation to go out. Friday night drinks? I was there. Brunch on Saturday? Count me in. A mini break in Prague? Where do I book?
I said “yes” to virtually everything and if I’m completely honest, it’s still something I struggle with. I have responsibilities now, so I can’t just go out on the spirit of the moment like I once would, but I am guilty of filling my diary up. That said, I am a little more self aware these days. I think if I really want to see the person and I also consider if I can afford it. If I can’t then I will come up with a cheaper alternative.
Feeling lonely lead to mistakes
If you’re a single person, then things can sometimes feel lonely and I spent a fair whack of my twenties single. If you don’t have that significant other to vent to and nobody to curl up with after a long day, when somebody invites you out for a drink, you go. I have always found it difficult to save money and budget successfully when I’ve been single and that yearn to meet somebody special had me out dating and spending cash.
Being taken advantage of… a mistake I learnt from
I’d happily buy anybody a drink. A colleague, an old friend, anybody really. But when you’re always the one getting the drinks in and the other person always ‘has to go’ before they have chance to return the favour, then you have to ask yourself why.
I think that I was a bit of a soft touch when I was in my twenties and some people took advantage of that. I’m not as quick to the first to buy the table a drink anymore, because if I’m at a table, I want to know that people are there for my company, not my bank card.
I would say that this vibe bled into my romantic life too. I wasn’t single for the whole of my twenties and spent a chunk of that time supporting my ex’s drink and drug habit, but that’s a story for another day.
I am an impatient person. Ask my mother, she will tell you. I want everything now, now, now. Back in my twenties, that included a car, a house, luxurious holidays, mini breaks, theatre trips, new clothes, new shoes. You can see the pattern.
I didn’t want to wait, or save up first. I wanted it yesterday. And there lies one of my biggest finance mistakes. You have time, you don’t have to do everything instantly and saving for something before buying it is much better than getting the credit card out. If you’re in debt, you’re paying for your past, but if you’re not, then any cash you earn is going towards your future. It’s just a shame I didn’t learn this until I was in my thirties!
My lack of budgeting also lead me onto another dangerous path; pay-day loans. I went through a period of getting them a quick fix, a bridge to get me to my next pay day. When I reflect on this, I am absolutely flabbergasted by my attitude. I never checked the interest rate, I didn’t give any thought to the impact it would have on my credit file, as long as I had money to see me through until Friday I didn’t care.
Store cards and ‘buy now pay later’ schemes were financial traps I didn’t fall into. But I did one hell of a lot of damage with pay-day loans. I am just so glad that I’ve paid everything off, I’ve reclaimed the small amount that I could via compensation schemes and that there’s no any trace of those companies on my credit file!
I never used to think much about the future. I could see the end of the year and maybe the start of the next one, but no further. This short-sighted thinking meant that I never really thought of, or prepared for the future, which was a big financial mistake. Of course the years were going to roll around, no job is ever totally secure and a major thing like a global pandemic can come and knock you off your perch. You’ll hopefully retire one day too. No, I didn’t think of anything like that. I just concentrated on my next holiday.
Not budgeting properly
Going out a lot is not necessarily a bad thing, but it is if you don’t budget for it. I just didn’t take the time to look at what I had on and how much money I had to spend. It seems silly now, but budgeting wasn’t a thing that I got to grips with until I was in my late twenties and not taking the time to develop this life skill was a huge financial blunders, which probably cost me thousands. But you live and learn.
Trying (and failing) to make money
I have tried all sorts to make money in my twenties. Some of those things worked, but others didn’t. I attempted no-risk matched betting for instance, but that didn’t work for me. Instead, it lead me to gamble when I’d never gambled before in my life. When it comes to financial mistakes, I recognise that that one could have been catastrophic.
There were other failures too. For example, I once bought a job lot of costume jewellery necklaces, thinking I could sell them off individually, but instead I ended up with a pile of them that nobody wanted to buy.
Using cash to show affection
I was definitely guilty of buying fancy gifts to show that I cared during my twenties. That’s fine, if you can afford it, but I couldn’t always and instead of thinking of a cheaper alternative that had thought behind it, I just bought the expensive item. How much you spend isn’t correlative to the amount you care, but it took me quite a while to figure that one out.
Now, in my defense, from the age of 26 I worked for a travel company and within that role travel was actively encouraged. In fact, the biggest perk of the job was that I got £1,000 towards a holiday each year and company conferences were often hosted in luxurious places. I was also paid to seek out holiday deals, so of course I used to book them for myself too.
Over that period, I spent more than I should on travel. I mean, the average person doesn’t have six holidays each year, right? But I did. And if I am being honest, I don’t regret doing it. I have so many happy memories from that period and I had some amazing adventures, including some wonderful solo travel adventures. I remember when people would ask me why I was going on trips alone and I used to say: “because I have the opportunity to. For all I know, I could meet the love of my life, blink and have a baby in my arms. And then the opportunity will have gone.” It turns out that I actually predicted my own fate with that particular rebuke.
So should my holiday addiction be added to my list of financial mistakes I made in my twenties? Probably. Do I regret making those mistakes? Absolutely not. But life is about balance and maybe I should have said “no” a couple of extra times.
Not going to StepChange
As I hit my mid-late twenties, I realised I needed help. Help to get my finances in order, because if I didn’t act, I knew I’d end up in serious trouble. But sadly I didn’t get help from the right place. Instead of getting free advice, I paid for it.
StepChange is a debt charity, operating across the United Kingdom. The organisation offers free debt advice and money management. However, when I realised I’d got into hot water with my fiances, I didn’t turn to them. Instead, I contacted a private company who did sort out my finances, for a monthly fee. In hindsight, I should have contacted StepChange, as it would have saved me a fortune.
Leaning lessons from my financial mistakes
So there you have it, a list of my biggest financial mistakes. I think it’s fair to say that I’ve learnt from these errors, because I can pinpoint where I went wrong, the debt I build up has been paid off and I now have savings in the bank.
My mind is very much connected with my fiances and I think that’s reflected in some of the silly decisions I made in my twenties. I treat money with more respect and care these days. I’m also more content and settled, which does play a part. I’m not lonely like I once was and I value good company over any company.
My twenties were a steep financial learning curve. If I had my time again then I would do some things differently. But I’d still book the holidays and say yes to Friday-night drinks. I’d just have actioned a few thrifty life hacks in between times.
I’m 36 now and I can’t proclaim that every decision I’ve made since I turned 30 was the right one. But I’m much more clued up, I’m debt free, I’m investing regularly and every day I try to do better. Let’s be honest, that’s all any of us can ever do.