15 Money Mistakes to Avoid in Your 20s (According to Reddit)

Your 20s are some of the most financially formative years of your life. Whether you’re starting a new job, paying off student loans, or managing a budget for the first time, it’s easy to misstep. But learning from others’ mistakes can help you avoid regret down the road. 

We scoured Reddit for real stories about money regrets in your 20s. These candid confessions offer valuable lessons that could help you make smarter moves with your money. 

KEY TAKEAWAYS: 

• Reddit users have plenty of money regrets — and they’re not shy about sharing them.
• The most common mistakes? Overspending, ignoring retirement savings, and skipping taxes. 

Mistake #1: Not building credit strategically 

Your 20s are when your credit history starts taking shape, but many Redditors admit they didn’t realize credit scores impact insurance rates, your ability to rent an apartment, and even employment opportunities for years to come. 

“Built up credit card debt, basically treated it as free money. It took a good few years to […] build up a good credit score again.” – u/[deleted]

"Don’t [finance] a car at a 20% rate or max out cards and you will be so far ahead in your 30s.” – u/Sumif

💡QUICK TIPS: 

• Start with a secured credit card or a low-limit card.
• Pay balances on time and in full whenever possible.
• Keep your credit utilization below 30%. 

Mistake #2: Lifestyle inflation 

As you earn more, it’s tempting to spend more — especially when friends are upgrading their cars, clothes, and vacations. But chasing appearances can drain your savings. 

Reddit users warn that “keeping up with the Joneses” can leave you broke, even with a bigger paycheck. 

“Keeping up with the Joneses […] is pretty typical mistake. Having nice stuff is nice — but paying for it isn’t.” – u/RoosterBurger

“Lifestyle creep is a financial killer. When you get a raise, put it toward retirement instead of that new truck.” – u/[deleted]

💡QUICK TIPS: 

• Automate part of each raise into savings or investments.
• Track spending with budgeting apps.
• Reward yourself mindfully rather than impulsively. 

Mistake #3: Putting off retirement planning 

Retirement might feel like a lifetime away, but saving early is a game-changer. The sooner you invest, the more time compound interest works for you. Many Redditors wish they had started with just $25 or $50 a month. 

“Not immediately putting some money (let’s be honest, ANY money) into some kind of investment savings. Almost anything would have been better than the nothing for the bulk of my 20s.” – u/gnamyl

“Not investing at 23. I thought, ehhh, I'm too young. Wrong. It's never too early to start.” – u/[deleted]

💡QUICK TIPS: 

• Contribute to an employer 401(k), if available.
• Open a Roth IRA. 

Mistake #4: Not paying student loan interest 

Student loan interest compounds and capitalizes, causing your balance to grow at a staggering rate. Several Redditors shared stories of their debt doubling because they deferred payments. 

“I can't stress this one enough. Just because it's out of sight, does not mean it should be out of mind. My loan amount doubled by the time I started my repayment plan." – u/GrumpyDucky

💡QUICK TIPS: 

• Make interest-only payments while still in school.
• Explore repayment plans and forgiveness programs. 

➢RELATED: How to Budget for Student Loan Payments

Mistake #5: Not paying taxes 

When your income is low or irregular, some young adults assume skipping a year won’t matter, but it always catches up. Penalties, late fees, and debt can add up quickly. 

“Not paying taxes because I was broke. The government doesn't forget, even though I did.” – u/GardenWeasle

💡QUICK TIPS: 

• File on time, even if you don’t owe much.
• Make sure you understand your withholding to prevent any surprises. 

Mistake #6: Impulse purchases and subscription creep 

Random expenses like unused subscriptions, daily app charges, and impulse buys can eat into your budget before you notice. Redditors warn that these “little things” often added up to thousands in their 20s. 

“Stay away from games with heavy micro-transactions.” – u/Few_Employer9012

“Alcohol and clothes were two big wastes of money in my 20s.” – u/[deleted]

💡QUICK TIPS: 

• Conduct a monthly subscription audit.
• Set spending alerts in your bank or budgeting app.
• Wait 24 hours before making impulse purchases. 

Mistake #7: Avoiding financial education 

Many Redditors wish they’d started learning about money management earlier — specifically for budgeting, investing, and building credit. 

“Not [understanding] Need vs. Want. I finally figured it out, but it took about 35 years.” – u/DonutStrong

“I spent around 10% more than I earned … with [nothing] to show for it other than debt.” – u/llamadeathtrap

💡QUICK TIPS: 

• Start small. Pick one financial topic to learn and track your progress with it.
• Use apps, podcasts, or community programs for incremental learning. 

➢RELATED: What is Financial Literacy?

Mistake #8: Buying an impractical car 

A new car is a milestone, but it’s an easy way to derail your finances. Redditors admit to sinking big chunks of their income into vehicles that quickly lost value. 

“Buying a car on payments. We didn't need such a nice car. Get the nice car when you're older and [can] buy it with cash.” – u/view-from-the-edge

“Car modifications. You're spending time and money investing in a metal box that will depreciate no matter how much ‘added value’ you put into it.” – u/the-goldfish

💡QUICK TIPS: 

• Choose function over flash.
• Don’t forget insurance, gas, registration, and maintenance costs. 

Mistake #9: Mixing money and relationships 

Making the wrong financial choices with a partner, family member, or friend can leave lasting scars. From co-signing loans to not having honest financial conversations with partners, Redditors share hard-learned lessons. 

“Taking any [random] roommate I could […] a few of them just decided not to contribute to rent.” – u/p4nic

“It's true what they say about never lending money to friends or family. Don't do it — or if you do it, don't expect it back.” – u/malibunyc

Mistake #10: Risky spending 

The urge to live in the moment hits hard in your 20s, but the effects are more long-term than hangovers. Redditors often regret overspending on habits that drained their wallets without building long-term value. 

“Gambling. . . My wins in baccarat turned to losses due to addiction. I wish I was smarter back then.” – u/OceanRebellion

“Gonna have to say [partying] and alcohol. Sure, I had a lot of fun, but having a good night out on the beers is expensive.” – u/ColdSnapSP

💡QUICK TIPS: 

• Set aside a small amount of your paycheck for entertainment.
• Avoid high-risk spending that threatens essentials and derails long-term goals. 

Mistake #11: Big-budget weddings 

Many couples regret splurging on a lavish event as a more modest wedding could have started their marriage on stronger financial footing. 

“A wedding is a single day. You don’t want to let your expensive wedding be the reason you and your spouse are unable to afford [a] house down payment, retirement savings, etc.” – u/willworkforwatches

“Have the smallest wedding possible. If you wouldn’t invite them to your home for dinner don’t invite them to your wedding!” – u/dinghy53

“Today I would go to the courthouse […] and not even bat an eye.” – u/chartreuse_avocado

➢RELATED: How to Save for an Engagement Ring

Mistake #12: Not buying enough insurance 

Many Redditors admit they skipped insurance coverage in their 20s to save money, only to face huge bills after accidents or theft. 

“Bought a car without gap insurance … got rear-ended by an uninsured driver. Still paying $200 a month for a car I don’t have anymore.” – u/mma1227

“An incredibly stupid mistake is to not have [renters] insurance. People [have been] financially liable for the damage caused by accidental fires.” – u/Longjumping_Elk3968

Mistake #13: Dining out too much 

Eating out is convenient and fun — but it adds up fast. Redditors say frequent meals out drained their budgets more than they realized. 

“I wish I had learned to cook earlier so that I could’ve eaten more homemade meals.” – u/PrettyGoodSpeller

“I didn’t pack lunch when I would go to work. I spent so much money on food … or rather wasted so much money.” – u/mslauren2930

Mistake #14: Not “adulting” right 

Adulthood comes with hidden costs and tough choices, from housing to career moves. Many Redditors admit they underestimated these realities and paid for it later. 

“Underestimating childcare expenses and failing to account for just how disruptive lack of childcare can be when self-employed.” – u/timginn

“Spending about 70% of my monthly take-home income on a car while living at home.” – u/Asid94

“I quit a job for a year because I was completely overwhelmed and had no life plan. I still had no life plan by the end of the year but now I had no money.” – u/Low_Engineering8921

Mistake #15: Bad timing 

Not every purchase is bad, but timing matters. Redditors often regret taking on responsibilities like pets, large appliances, or hobbies before they were financially ready. 

“If you plan to have pets, start a savings fund. That’s how I got into trouble… unexpected emergency vet visits that I couldn’t pay off right away.” – u/Pilea_Paloola

“Buying a front load washer. The one we had was still working and did a fine job." – u/[deleted]

Build a solid foundation 

Everyone makes financial mistakes, especially when you’re young. What matters is learning from those mistakes and taking the necessary steps to develop better habits. 

What’s the biggest money mistake you’ve ever made? Join the conversation on Facebook!