First Person: 3 Financial Lessons I Learned in My 20s

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In my 20s I wasn't as financially responsible as I should have been. I didn't save any of the money I was making for the future, and worse I wasn't spending it wisely either. I often found myself low on cash with bills due, which meant I had no way to pay them. Thinking back now I regret not handling things the right way, and I regret letting my finances cause as much stress as they did. However, all the troubles did teach me some valuable lessons. Here are three financial lessons I learned in my 20s.

Don't pay the minimum payment

I received my first credit card when I was 18-years-old, and foolishly charged purchases when I had no job to repay what I spent. My father was kind enough to pay the minimum payment for me until I got a job, but even then I wasn't paying anything extra. I carried a balance on that card for the next 13 years before paying it off in 2011. If I would have paid a little extra each month and stopped using the card I could have paid it off years earlier and saved hundreds if not thousand of dollars in interest fees.

Don't pay luxury expenses first

In my early 20s cell phones were becoming more and more common, and I decided to join the "in crowd" by getting a phone of my own. The problem was that I wasn't responsible with my money, so when it came time to pay my car payment and cell phone bill, I would pay for the phone first, and worry about the auto loan later. Doing that always meant paying expensive late fees on my auto loan, which would put me in an even bigger financial bind. Now, I refuse to pay for luxuries like a cell phone or cable television before my major expenses are taken care of, even if it means shutting something off.

Don't borrow money to pay bills

It's never a good idea to borrow money to cover your expenses. Some time ago, I needed $250 to pay some medical expenses, and because of my poor financial choices I didn't have it. I was forced to borrow the money from a payday loan company, and after all their fees and interest I had to pay back a total of $486.16 That's a total $236.16 or about 94.5% more than I actually borrowed. If I faced the same scenario today I would sell my belongings until I could pay the bill outright, and avoid the extra cost.

Applying what I learned in my earlier years has allowed my husband and I to be nearly debit free in our early 30s. Aside from our home and a very small credit card balance we have no other outstanding loans/debit, and I have to admit it's a pretty good feeling.

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