When I think about my financial journey, there are several key moments I wish I had approached differently. As adults, many of us feel we’ve learned about money management a bit too late. But it’s never really too late to make a change. Looking back, there are several things I regret not doing sooner to save money. These are decisions and habits I wish I had embraced earlier. Whether you’re in your twenties or forties, I’ll walk you through lessons I learned the hard way—so you don’t have to.
Table of Contents
1. Not Starting to Save for Retirement Early Enough
The first thing I regret is not saving for retirement from the very beginning of my career. In my early twenties, I didn’t think much about retirement because I was focused on the present. Why worry about retirement when it’s so far away, right? Well, as I’ve learned, the earlier you start saving, the more you benefit from compounding.
Let me illustrate this with an example. Imagine two people: Sarah starts saving $100 every month for retirement at age 25, while John waits until he’s 35 to start saving $100 each month. Let’s assume an average return of 7% per year on their investments.
| Age | Sarah’s Investment at 7% | John’s Investment at 7% |
|---|---|---|
| 25 | $0 | $0 |
| 35 | $17,117.75 | $0 |
| 45 | $48,680.45 | $17,117.75 |
| 55 | $102,097.95 | $48,680.45 |
| 65 | $189,563.47 | $102,097.95 |
You can see that, despite starting 10 years later, Sarah’s retirement fund grows much more than John’s. The power of compound interest works best when you start early. If I had taken this approach, I would’ve had far more money available for my retirement today.
2. Not Creating a Budget Sooner
Another mistake I made was not creating a proper budget. In my younger years, I was flying by the seat of my pants when it came to money. I didn’t track where it was going or keep an eye on spending. I didn’t even have a clear picture of my monthly income versus expenses.
Once I started budgeting, things became much clearer. It’s all about awareness. Knowing exactly where my money is going allows me to adjust spending habits and redirect funds into savings. You don’t have to follow a rigid budget, but it helps to know how much you’re spending on essential vs. non-essential items.
For example, let’s say I spend $300 a month on dining out. If I cut this down to $100, that’s an extra $200 every month that can go toward savings or paying off debt. In a year, that’s $2,400 more that I could have saved.
| Expense | Current Spending | New Spending (Cut 2/3) | Annual Savings |
|---|---|---|---|
| Dining Out | $300 | $100 | $2,400 |
| Total Savings | $2,400 |
The numbers might not seem huge, but small adjustments like this can have a big impact over time.
3. Not Building an Emergency Fund Early
Having an emergency fund is something I wish I’d prioritized earlier. Life is full of surprises, and I didn’t realize how important it is to have a cushion for unexpected expenses. I remember a time when I had to use credit cards to cover a car repair bill because I didn’t have an emergency fund. That debt lingered for much longer than it should have, and I paid interest on it for months.
I now aim to keep at least three to six months’ worth of expenses saved up. This gives me peace of mind knowing that if something unexpected happens—like a medical emergency, job loss, or major repair—I won’t have to scramble for funds.
Here’s a simple way to calculate how much you need in your emergency fund:
| Monthly Expense | 3-Month Fund | 6-Month Fund |
|---|---|---|
| Rent: $1,200 | $3,600 | $7,200 |
| Utilities: $200 | $600 | $1,200 |
| Groceries: $400 | $1,200 | $2,400 |
| Insurance: $150 | $450 | $900 |
| Total: | $5,850 | $11,700 |
Having this emergency fund ensures I don’t need to rely on credit cards or loans during a crisis.
4. Not Paying Off High-Interest Debt Sooner
Debt, especially high-interest debt, is something I should’ve tackled much earlier. I remember carrying around credit card debt for far too long. The high interest rates on those balances meant that I was barely making a dent in the principal.
For example, let’s say I had a credit card balance of $5,000 with an interest rate of 18%. If I only made minimum payments, it could take years to pay off, and I’d end up paying far more than the initial balance.
| Credit Card Balance | Interest Rate | Monthly Payment | Time to Pay Off (Minimum Payment) | Total Paid (Including Interest) |
|---|---|---|---|---|
| $5,000 | 18% | $150 | 4.5 years | $8,105 |
If I had made larger payments or focused on paying off high-interest debt first, I would’ve saved hundreds, if not thousands, of dollars in interest. I now prioritize paying off high-interest debt as quickly as possible, then work my way down to other debts.
5. Not Taking Advantage of Employer Benefits Sooner
Another thing I didn’t fully appreciate until later in my career was the value of employer-sponsored benefits. Many employers offer things like retirement matching, health savings accounts, or even education reimbursement. These are opportunities to save money or invest in my future that I didn’t take advantage of early enough.
For instance, if my employer offers a 5% 401(k) match, that’s essentially free money. If I only contributed 3%, I was leaving 2% on the table. Let’s say my salary was $50,000. If I contributed 5%, that’s $2,500. If the employer matches 5%, they’re putting in another $2,500. Over time, that can add up significantly, especially if compounded.
| Salary | My Contribution (5%) | Employer Match (5%) | Total Annual Contribution |
|---|---|---|---|
| $50,000 | $2,500 | $2,500 | $5,000 |
| 10 Years | $25,000 | $25,000 | $50,000 |
6. Not Investing Sooner
Finally, I wish I had started investing much earlier in life. Like many people, I was hesitant to jump into the stock market, unsure about where to start or how to manage the risks. I now know that investing is one of the most effective ways to grow wealth over time. The earlier you begin, the more time your money has to grow.
Even if you start small, it’s about consistency. For example, let’s say I invested $200 a month for 20 years at an average return of 7%. Here’s how that would add up:
| Years Invested | Monthly Investment | Estimated Total Value at 7% Return |
|---|---|---|
| 20 | $200 | $101,184 |
| 30 | $200 | $194,695 |
As you can see, the difference between investing for 20 years versus 30 years is substantial. I could have had over $100,000 more if I had started investing earlier.
Conclusion
In the end, these are the financial habits I wish I had started sooner. By prioritizing retirement savings, building an emergency fund, paying off high-interest debt, taking advantage of employer benefits, and starting to invest early, I could have saved more money and built wealth faster.
It’s never too late to start, though. Whether you’re just beginning your career or in the middle of your financial journey, you can still implement these habits and turn your financial life around. I’ve learned these lessons, and now it’s your turn. Start today, and in the future, you’ll be glad you did.