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Money Lessons I Wished I Knew In My Early 20s

04/14/2015 10:14 am ET | Updated Jun 13, 2015

I've had my fair share of mistakes when it comes to personal finance. Last week I wrote a post about how online poker changed how I view money. I was spending money like there was no tomorrow, splurging on unnecessary items, and didn't save a single penny of winnings.

Ten years later, I look back and think about how things would've been different. I play out these "what if" scenarios in my head thinking that I'd have a more sizable retirement account, or I'd be traveling around the world in the most exotic destinations.

This certainly isn't the case. I'd be lying if I told you that I didn't regret some of the poor financial decisions that I've made, but what I've learned from these mistakes helped me pave a new road with very minimal road blocks.

Here's How It All Spiraled Out of Control

I remember seeing an advertisement on campus from Citi Bank recruiting college students to sell credit cards. We would go around campus getting students to sign up for a card and in return we would give them a plain grey tee shirt that said "COLLEGE" on the front. We got paid $5 per each sign up. It was quick money.

Of course, I signed up for a card myself. Targeting college students was a brilliant move. They had no established credit history and had no experience dealing with credit cards.

Initially, I didn't use my credit card too much. That slowly changed. After seeing the monthly minimum payments, it looked manageable. Things started to turn for the worse as my balances steadily increased and before I knew it, I was hovering around the maximum credit limit.

Credit cards are not evil. It's a necessary tool to build credit history. Learning how to use it responsibly is a whole another ball game. Always make sure you're below thirty percent of the credit limit and make sure you're paying it off in full all the time. If you aren't able to pay it off completely, do the best you can. Next, go through your bank statements and carefully evaluate why you aren't able to pay it off. Have you been spending a little more money than usual? That's okay, it happens. The important thing is to learn from your mistakes and make immediate changes. Put an action plan into place to make sure you're going to be able to save enough money the following month to pay off your credit cards in full.

The Knockout Punch

I was eventually able to pay off the credit cards in six months. This was only the first round. One of the biggest money mistakes I've made was a combination of not saving money and caring what my peers thought about me.

Many college graduates seem to think of their careers as a race: who can make it to the top quicker, who has the nicest car, and who's living life like a rockstar. I was guilty of this. We've all heard of the idiom"keeping with the Joneses",and that's exactly what I was doing.

Far too often we find ourselves bench-marking against our peers. We never want to be that person who seems to be lagging behind others. From the latest gadgets, fashion, and weekend vacation trips, it's only a matter of time before you find yourself buried in debt.

Reflecting On The Battle

All my money mistakes really come down to one thing. Saving money and living within my means. It's a simple formula that many struggle to execute on.

When you start to care less about what people think about you and start caring about your financial goals, life gets a little bit easier. Buying a home or contributing into a retirement plan doesn't seem like a priority in your early 20′s but as the years fly by, you'll be facing an uphill battle.

It's okay to stumble along the way as long as you're cognizant about the mistakes you've made. Perfection does not exist in the personal finance world.

What was your biggest financial mistake in your early 20s?

This article originally appeared on ReadyForZero: Money Lessons I wished I Knew In My Early 20s

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