Dealing with finances can be difficult at any age, but your relationship with money in your 20s is particularly memorable — and often fraught with mistakes. Looking back, there’s probably a lot you wish you knew at the time, like how to save early and spend less, or the do’s and don’ts of credit cards.
Even some of the most successful people admit to having made money mistakes as a 20-something.
Business Insider recently asked five successful leaders at Cosmopolitan and SoFi’s “Fun Fearless Money” event what they wish they’d know about money in their 20s.
Check out their responses — and advice — below:
Learn the concept of delayed gratification
Kat Cole, president of Focus Brands:
“What I wish I would have known is more principles and practices around saving and consciousness about how I was spending my money. And the concept of delayed gratification, which I was really not good at.
“When you’re making a bunch of cash you can do whatever you want, whenever you want … If I had instilled the practice of ‘Yeah, I want something, but do I need it? I’m going to wait.’ One of two things is going to happen: Either the desire for it will go away and now I’ve saved that money, or when I get it, I’m going to be much more grateful for it — and maybe it’s on sale at that point.”
Cindy Ord/Getty Images for Cosmopolitan
Create a nest egg
Sara Blakely, founder of Spanx:
“It’s really important to save money and create a nest egg, become comfortable for yourself with what the nest egg is. And don’t touch it. Leave it there. I always had a portion of my paycheck put into savings, and that was an easy automatic way.
“So if employers offer that, I would suggest that people sign up for that because then it’s kind of out of sight, out of mind. When I started Spanx, I kept my day job for the entire time I pursued it. I didn’t quit my job until I’d already landed Neiman Marcus and Saks Fifth Avenue. I was so careful, I [worked on Spanx] at night and on the weekends, because I didn’t not want to have income coming in.”
Be wary of credit cards
Joanne Bradford, chief operating officer of SoFi:
“My first job I worked at Macy’s and they gave you a 20% discount, but the only way you got the 20% discount is if you charged it on the Macy’s card and the interest rate was in the high 20%, so it wasn’t really a discount at all. So that was a hard lesson. I wish I would have understood the real cost of credit card debt. I quickly course corrected on that and then understood the power of compounding.”
Don’t fear money
Michele Promaulayko, editor-in-chief of Cosmopolitan:
“What I wish I knew was that it’s way smarter to begin to understand an intimidating topic like money than to just think it’s going to go away. Because obviously money is integral to every part of life — you need it in negotiations, you need it to figure out how much you can spend on rent, etc. I would say just to be less fearful of money. And invite in the learning that comes with managing your finances.”
Know how much you spend
Jenn Hyman, cofounder and CEO of Rent the Runway:
“I think the number one thing you can do in your 20s is just have awareness of what your expenditures are. It will likely be the case that some of your expenditures are way higher than you allow yourself to believe.
“For me, in my 20s, I was spending 80% of my take home income on clothing. I didn’t want to admit that. If you had asked me in my 20s, I never would have told you that, but that was the reality. And I wish I could go back in time and have a rational conversation with myself as to better ways to spend that money.”
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