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5 Things I Would Do Differently With My Finances If I Were in My Early 20's

Updated: Feb 5, 2021

I have to admit that as a young adult I was not doing any serious financial planning myself. I had a few thousand bucks set aside in my bank account for rainy days and that was that. I didn’t think about what was going to happen 10 years down the road let alone when I retire. I was thinking, if I was thinking at all, that I will figure it out as I go. I was talented, educated, ambitious. I was already making good money as an occasional interpreter, surely I would be making more and more money as I make my way in life.

What I did not consider, however, is that even though I became really good at my job in advertising and I was moving up the career ladder fast, life had a few surprises for me.

My personal circumstances shifted in my early thirties, which left me with depleted savings and eventually led me to move to a different country and I had to accept a lower position with lower pay. Then, in my early forties, chronic health issues made it impossible for me to keep working in a physically and emotionally draining industry. All these were setbacks, not in terms of personal growth, but in terms of building wealth for the future me and more importantly, setbacks that I did not account for.

I’m still on a good path to retiring relatively early and being able to enjoy life the way I would like thanks to a few things I started doing in my thirties and I will share them with you so that you can get a head start on your financial journey and reap the benefits earlier than I will be able to do.

When it comes to financial planning, the best advice I have for you is the same that I would give about relationships, work, or fitness regimens:

Think long-term / Educate yourself / Be as honest and realistic with your current self as possible / Have empathy toward your future self / Choose a partner whose values are aligned with yours

1. Think long term.

All that defines the quality of your life, relationships, work, your health, your finances, will be as paramount 40 years down the road as they are now. What makes you happy this very moment might not necessarily be what will make the future you fulfilled but you need to consider that you will have needs in these areas 10, 20, 40, maybe even 60 years down the road.

2. Educate yourself.

Unfortunately, schools don’t teach financial skills. It’s really on you to figure out how to budget, how to avoid debt, and save money. Fortunately, there are countless resources available on the internet; you can find a good list of them here. Hit these guys up, and learn how to be a good manager of your money and therefore partly, your life.

3. Be honest and realistic.

It is indispensable that you take a long, hard look at what you really want in life. But more importantly, are your goals achievable with your skillset and career plan? Do you know where you want to live, what kind of house would you like to buy? How many vacations are you planning to take every year? How much are your everyday hobbies and lifestyle preferences going to cost you? Are you planning to have children, and if yes, how many? Do you want to pay for their college education? What kind of cars do you want to own and how often will you upgrade them? Will your future job pay for all the things you desire? Will it also allow you to save 15% of what you make to put toward retirement? If the answer is no, you’ll either have to tweak your desired lifestyle or you will need to find a job that will enable you to buy that house, go on that vacation, and drive that car you are craving. Prioritize and move forward accordingly.

However, being realistic about what you are capable of is just as important as being honest about your goals in life. When you are in your early twenties, it’s easy to believe that you will be able to excel consistently in a high-paying, demanding job. However, if you consider your personality, any underlying health issues, your potential future family circumstances that might require your focus and energy, will you be able to stay in a demanding position for 40+ years?

4. Have empathy for your future self.

People usually use the word empathy when talking about people other than themselves. However, our future self almost feels like a stranger. It’s so hard to imagine the 65-year-old us when we are just 20. Who cares about that old dude now when this young stud has more pressing needs? That’s why we need empathy toward our future selves so that we take them just as seriously as we do our current ones. Don’t screw yourself either now or in the future.

5. Choose a partner whose values align with yours.

You can be as frugal as your grandma but if your partner is not, you will not be able to achieve what you are striving for. They will not only not contribute to your mid-term and long-term goals, but they will also spend whatever you have set aside. It happened to me and many of my friends. Needless to say, we chose more prudently the next time around.

All in all, my advice is to be very aware of what financial needs you are going to have in life and make a plan as to how you are going to cater to those needs. There might be bumps in the road but if you started on a good path, you will reap the benefits you are working toward. Take control, get peace of mind, and enjoy the ride.


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