The Financial Pitfalls of My 20s: How I Got Back on Track
Are you tired of living paycheck to paycheck? Do you work hard week after week, only to end up frustrated with little to show for it?
While you love your parents, do you find yourself repeating their financial mistakes and unsure how to break the cycle?
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My 20s
I remember being in my early 20s. I was no longer a “child” and was frustrated with anyone who treated me like one. I was young and wanted to figure things out for myself, but I didn’t really have anywhere to go for help without getting judged for it.
I felt like I was stuck out in the world trying to figure things out for myself. That’s why I’m here on My Other Shoelace… to make sure you aren’t alone trying to figure it all out for yourself.
Future Posts
Before we go any further, I want to invite you to message me at [email protected]. Send me the questions you need answer to, the problems you need help with, and the how to’s that you need explained.
It may take me a while to find the right answers, but I will try my best to get you the quality responses you need and deserve… and I will never call you out.
Just to be clear, this is a family friendly blog, so anything that doesn’t fit in that category won’t be answered publicly.
Money
During my 20s, money was probably one of, if not THE biggest problem I had. I just didn’t have enough of it to get to everything, and I felt like it was a huge hindrance.
Everything required money- from the apartment I lived in, to the gas I put in my car. I worked full-time, but just kept getting deeper and deeper in the debt… making huge mistake after huge mistake.
1. Credit Cards
Now, credit cards in and of themselves are not evil. Used correctly, credit cards can help build your credit score and actually help you in the future. The key is to use them for emergencies only and pay them off every month.
In my 20s, I had 3 credit cards and they were all constantly maxed out. Not only were they maxed out, but I was only paying the minimum each month.
Where it Went Bad
The credit cards would occasionally charge interest fees before I got a chance to pay the bills, and it would trigger over-the-limit fees. This would cause the bill to be more than I could afford and I would have to wait until my next paycheck to pay it. This would sometimes trigger a late fee charge and I would just be stuck in this cycle.
It was so stressful, and I couldn’t go to anyone for help, because I was the one who charged up the credit cards. As you can tell, I was in a never-ending loop of credit card debt. Getting to the point where I could pay them off was extremely hard, but one of the best things I ever did.
2. Overdraft Fees
Back when I was in my 20s, banks would charge $35 for every purchase you made if your account was below or went below zero dollars. This was before the days of online banking or even having email on your phone, so you wouldn’t even get an alert about being below zero or for each overdraft. You would, however, get a postcard in the mail 3 days after the fact.
I remember one day I overdrafted $10 in gas, $3.50 at McDonald’s, and $4 at Starbucks, triggering $105 in overdraft fees from one day. All because I forgot to record one tank of gas in my register.
See, I always TRIED to balance my checkbook, but I would forget something here or there and it would throw me completely off. I would get so far behind from overdraft fees that I would have no choice but to turn to my next “financial mistake.”
3. Payday Loans
This financial blunder is when you borrow money against your FUTURE paychecks. As in ones that you haven’t gotten yet. This takes living “paycheck to paycheck” to a whole new level.
Instead of having to go 14 days on one paycheck, you are getting that money early (for a huge fee), and almost guaranteeing that you will need to take out another payday loan before your next payday.
It became a long, agonizing cycle. I ended up getting so far in debt with this one that my mom had to lend me money to get out of it. I don’t know how I could have done it without her.
4. Bought a Brand New Car
It was my first year of teaching and we were having a Christmas play that night. I remember driving into the parking lot and everyone was looking at my car with the loud exhaust. It was so embarrassing.
I think it was later that day that I drove my completely paid off car down the street to the car lot and signed papers for a brand new 09 Nissan Versa. It was the cheapest possible car I could get with absolutely NO frills. That thing didn’t even have a radio.
I spent miles upon miles with a boombox in the seat next to me, just so that I could pretend that I could afford a brand new car. My finances were such a mess that I couldn’t even afford to fix the heater less than two years later when the wires overheated and melted together (not covered by warranty). It was stuck on heat in the middle of summer… such a mess.
Take my word for it… please don’t buy a brand new car. If you must take out a loan- do a TON of research and find a reliable used car.
5. Going From Hourly to Salary (without comparing the wages)
The last financial mistake I will list here is when I went from making a good hourly wage to signing a salary that was MUCH less per paycheck… just so I could get the summers off.
See, when I got the job teaching, I had negotiated a good hourly wage, but when I decided that I wanted to have the summers off, I didn’t negotiate. I assumed my boss would give me a salary that was equivalent to what I was making.
Oh boy… was I ever wrong! She went low assuming that I would negotiate, and I just accepted it. I ended up having to work after school AND during the summer for the hourly wage just to make up the difference.
*Good Decisions*
While I made a lot of bad financial decisions in my 20s, there was one decision that I made that turned it all around. I decided to take on extra work to actually get ahead for once.
I got a second job delivering pizzas in the evenings and on the weekends. Delivering pizzas put a little extra cash in my pocket at the end of every shift, so it kept me from overdrafts and needing things like payday loans. I was able to use the cash to put gas in my tank without worrying about all that could happen.
Not only that, but I also started cleaning for a friend. I cleaned her house every other weekend, and having that extra money gave me the freedom to breathe a little bit. I was working MANY hours between the three jobs and I used the money from her to “treat” myself to a quick tanning session every couple weeks.
*Added Bonus*
I can’t promise that it will work out for everyone the same, but in my case- delivering pizzas was where I happened to meet my now husband of 12 years. All-in-all, taking on the extra work turned out good for me.
Things I wish I Knew Sooner
- When you find yourself in the hole financially, there are NO “easy” ways out. Your best bet is to find a side gig (in addition to your current job), that pays cash tips at the end of the night. Jobs like Dominos, Doordash, cleaning houses, or waiting tables. These kinds of jobs are your best bet to get ahead.
- Once you have a steady stream of money coming in- you have to make and stick to a budget. Schedule out when you will pay each of your bills, and live off the leftovers. Don’t spend what you want and try to pay the bills later.
- IF you truly do not make enough to get by and working a side gig is not an option, then you might have to take a hard look at your current position. I am NOT saying to quit your job. What I am saying, IF you must, spend some time and energy redoing your resume and try sending it out to see if you can find a new position that will help you meet your needs a little better.
I hope with all my heart that you are not stuck in any of these financial holes, but if you are- I want to encourage you- there is light at the end of the tunnel. Working hard now to get ahead will only benefit you in the future.
