Financial Advice I Wish I Knew In My Early 20s

Developing a personal financial plan isn’t easy. Regardless of whether it is taking baby steps to identify your investment strategy or personal budget, we can easily make rookie mistakes. In our university or fresh grad years, many of us tend to splurge on frivolous things (“It’s so prettyyyyy! And it was on sale!”) when we go window shopping or browsing online. At the end of the month, we then wonder why we are broke. Fret not! We have asked our team what they would have advised themselves in their early 20s and here was what they had to say:

Timothy Ho, 28

I spent too much when I was in university. At that time, it felt reasonable as a student to not save because I was after all, still a student. I reasoned with myself that I didn’t have a full-time job and hence, saving would be difficult. I thought I would start saving only after I entered the workforce, which I thankfully did.

I remember there were months where I actually had a pretty sizeable income. I was getting about $1,000 a month from my internship, and had about another $500 from giving tuition. I also received allowance from my parents during those months, which means I didn’t actually need to spend any money that I earned from working.

In hindsight, I could have easily saved and started investing about $1,500 in those months. If I could advise my younger self, it would be to save that money that I had, instead of spending it away. I could have lived with a lot lesser. Many people do. It’s not something I am proud of. But I want to share about it so that others can avoid making the same mistake.

Dinesh Dayani, 29

The one financial advice I would have given myself is to start investing younger. I only started investing when I was about 26 years old when I really could have started when I was closer to 20.

I already had a decent amount in savings when I turned 20 and had I known the effects of compounding, and been exposed to the financial markets earlier, I could have really used it to my advantage.

Of course, the key to this would have been education on financial matters, which I could have picked up when I was studying and had a lot of free time at 18.

Shane Ai, 26

Number one advice would be to educate myself on financial matters as early as possible. When you’re a student, you have much more time than someone who is working a full-time job. So use that time efficiently to learn the basics like budgeting, investing, and so on. That way, when you eventually graduate, you will be running on autopilot when others are struggling on the learning curve.

Like Tim, I am a big proponent of saving as early as possible. It may seem boring or pointless when you’re a student, but that money will come in handy someday (eg. For mortgage downpayment). Learn to think of the big picture and apply self-discipline to your finances – the benefits will compound over the years.

Top Image Credit: DollarsAndSense.sg

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