The Biggest Financial Mistakes I Made in My 20’s

Sherita Rankins Busy wife Busy life

When I was in my 20’s, I thought I had it all figured out. I was finally living on my own and making enough money to support myself, but little did I know I was also setting myself up for financial failure. My careless financial habits and frivolous daily purchases were going to snowball into a mound of debt that I wouldn’t be able to get myself out of. They say hind sight is 20/20, but if I knew then what I know now, I would probably be living on easy street. Here are the biggest financial mistakes from my 20’s that you should avoid at any age.


I used to go to Starbucks every morning, never realizing that a single cup of coffee was killing my bank account. Even if you don’t order a non-fat triple soy extra pump caramel latte, your regular morning coffee can drain your bank account little by little. The only people who financially benefit from your daily trip to Starbucks are the company’s stockholders. If you spend $3 per day on coffee every workday, that adds up to $780 a year. Investing in a coffee pot and brewing your own cup will save you hundreds each year.


Not Looking at Price Tags

I used to go shopping and acted like I owned the store. Just trying on anything I thought looked cute and if I liked it, I’d just head to the register. Never knowing how much I spent until I got the receipt (talk about sticker shock)!

I’d put the entire purchase on a credit card I had no intention of paying off right away, only added insult to injury. Luckily, I took control of this bad habit and started comparison shopping, taking advantage of sales, and mastering the art of shopping online. I have saved so much money; I no longer consider shopping a vice, though my husband may think otherwise.


My friends would always think I was such a jet setter! Every Christmas my mom and I would be on a beach somewhere. We went on cruises, and even decided to spend a month gallivanting throughout Europe. The problem was I would never save up for the entire vacation, but just enough to justify planning the trip.

Don’t get me wrong, I think that it is very important to travel and experience different cultures. The key is saving money for the entire trip while still being financially smart with my day-to-day purchases. This method would have been a much better financial decision.

Leasing Brand New Cars

I got my first car at the age of 16. It was a brand new Chevy Camero. Even though I was working and making a significant salary modeling as a teenager, looking back, the money I earned wasn’t enough justify my $359/month lease. My leasing habit continued into my 20s, until I moved to New York in 2005. I spent over $26K on cars over a 5 year period with nothing to show at the end. I could have bought a mid-priced car and been able to sell it before it my move to put some extra money in my pocket.

Opening Credit Cards to Transfer Balances

After many impulse purchases and vacations, my credit card started to reach its limit. So instead of making a plan to pay the balance off, I opened a new card with a balance transfer offer to help alleviate the high balance/high interest rate. When you get balance transfer offers, I highly recommend taking advantage of them to lower your interest rate. But, when you utilize a new credit card offer to move over balances and continue to use the card you just paid off, you will only put yourself more and more into debt. You also will ruin your credit score by having to many revolving lines of credit with high balances.

Not Saving for Retirement

In my 20’s, I wasn’t working in an office that provided a retirement plan. As a result, I didn’t think it was important to put aside money out of my paycheck towards retirement. Even though I was investing in the market, I wasn’t taking advantage of the tax benefits of an actual retirement plan. A Roth IRA would have been my smartest choice since the contributions grow tax free. If I had started my contributions earlier, I wouldn’t be playing the catch up game now.

I Did’t Make a Monthly Budget

Despite the fact that I majored in finance, I didn’t apply the things I learned to my own income. I totally understood the principles of budgeting. When was young I would watch my mom balance her checkbook, but never did it myself. If I had a better grasp of where my money was going, I truly believe I would have made smarter financial choices. If you need help starting your own budget check out my guide here.

The bottom line is that I let my money take control of me and as a result, I started my thirties worse off than I should have. It is never too late to correct your financial mistakes. Take a hard look at your habits and start making smarter choices today!

What financial mistakes have you made? Did you get yourself back on track?


Sherita J. Rankins

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  1. 1.23.15
    Nikole said:

    I can definitely relate to this. The 20’s can kill your financial future if you don’t ever start to see the habits for what they are…mistakes.

    • 1.25.15
      busywifebusylife said:

      Nikole, you are so right. You have this urge to start living like an adult with really making the right financial choices.

  2. 10.18.16
    Shelbi said:

    I did the same thing in my 20s and I too am playing the catch-up game. Thanks for this great post. 🙂