The Financial Time Machine: Money Lessons to My Younger Self

Advice lessons about money

From how to spend your first paycheck to when to buy your first house, financial advice abounds for those in their early 20s. And all too often, this advice goes ignored.

We all wish we could go back in time and give advice to our younger selves, and that's especially true when it comes to the boneheaded money mistakes of our youth. So we asked some older professionals about the financial mistakes they made when they were younger -- and the tips they'd give their past selves if they had the chance.

No One is Impressed by Debt

Ted Grigsby of Human Investing in Lake Oswego, Ore., learned the hard way that an expensive car was a luxury he couldn't afford. Rather than buying a modest used car after college, the financial advisor purchased a new Audi A4 for nearly $30,000.

"It was a great car, but not for me at that point in my life," Grigsby says. "My payments were high, my insurance was high, new tires cost a ton, maintenance was pretty rough and it didn't get the best gas mileage."

Those expenses added up.

"I figure I was paying up to $800 or more per month for a slightly above-average car that offered no real value other than having a bit more confidence when picking up a first date," he recalls.

Shane Fischer, an attorney in Winter Park, Florida, made the same mistake.

"I wanted the status symbol of a new car, but after a few months the novelty wears off and nobody is impressed with your car," he says. "Since it depreciates super fast, there's no point in wasting money on a new car when a quality used car will work just fine. I could've saved thousands of dollars had I just bought used."

For the Love of Unicorn Quilts

Stuck in a dead-end job? Don't quit, says John Barnes, until something else is lined up.

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"It's okay to bail on being a bank vice president to produce unicorn quilts, if that's what you dig," says the Denver-based theatre designer. "But the day after your going-away party at the bank, you need to get up, hang up your reference picture of a unicorn, and start quilting. Don't bail out on a paying gig, no matter how depressing and frustrating, just to stay home in your jammies."

Lakesha S. Womack of Womack consulting says that your own personal "unicorn-quilt" business might not be too far out of reach.

"If I knew coming out of college how little it actually cost to become an entrepreneur, I would have started my own business much earlier," Womack says. "Focusing on a lean start-up allows almost anyone in a service-based business to become a business owner with little-to-no overhead. However, I was too afraid to research the possibility because I thought it was too expensive."

Playing Catch-Up

The adage "a penny saved is a penny earned" rings true: Everyone we spoke to agreed that they wished they had saved more, taken advantage of compounded interest, and maxed out company 401(k) benefits in their early 20s.

Adam Koos, a certified financial planner and the president of Libertas Wealth Management in Columbus, Ohio, says those small steps can make a large difference in a very short time. He says even those with high salaries should create and stick to a budget, never carry credit card balances, and always keep three to six months' worth of expenses in an emergency fund.

"As soon as you start making money after college, it's tempting to spend it, but it's crucial that you start putting away at least 10 percent of your income into a qualified retirement plan," Koos says. "[Saving] 15 to 16 percent, including your employer match if you have one, is ideal. You do this now and get used to it, you could be a millionaire by your late 30s."