We have this belief in our culture that what happens in our youth does not have any impact to us when we become adults. The attitude of having fun and worrying about the consequences of our decisions later as well as what happens in your 20’s stays in your 20’s is very prevalent. However this belief can really do harm to our personal finances not only in our 20’s but also as we get older.
The reason for this is that the financial habits that you develop in your 20’s will be carried with you as you grow older and move into other stages of your life such as getting married and having children. If you rely on the use of credit to finance your cars, everyday purchases, and even your education, you will continue to rely on credit in the future. This will severely hamper your ability to build wealth as debt robs you of that ability by committing our income to past purchases rather than investments for the future.
Speaking of financing your education, student loan repayment can carry well into your 30’s and 40’s and even longer depending on how long your finance them for. Think about it, do you really want to still be paying on your student loans when your children start college? Student loan debt is an easy trap to fall into because you do not have to pay them back right away. But you DO have to pay them back, so pick a school you can actually afford and try to do it debt free!
Finally, bad debt can come back to haunt you when you can least afford it to. Yes, we all make mistakes financially, especially in our late teen to early 20 years. But bad debt from those mistakes will affect you years after that. You will not believe how many times I have heard of couples sitting down and trying to purchase their first home together and getting declined for a mortgage because of an old outstanding bill they had back in college that they forgot about. Old outstanding debt needs to be repaid, no matter what the amount is.
So what happens financially in your 20’s stays in your 20’s does not really apply too well. If you borrow a lot for school you will be paying for it later. With that being said if you develop good spending habits in your youth, those habits will carry you on to bigger and better things in the future!
So what about you? What are some past financial mistakes that you have made in your youth that you regret later?