At a Glance

Hindsight is everything. If you’re past your twenties, you probably have a couple of hard-earned money lessons under your belt. If you’re still in your twenties or younger, maybe you want to avoid certain mistakes so you can set yourself up for financial success later in life. And if you’re a woman, you face systemic barriers such as the gender pay gap that can slow down your earning potential. To help you gain extra wisdom and grow your net worth regardless of your age, here are nine things three financially-savvy professional women wish they knew about money in their twenties.

In this article, you’ll learn:

Mental health and finances go hand in hand

“I was raised by a single mother who didn’t speak English well and struggled to provide for me and my sister. I struggled with depression and didn’t realize until many years later that your mental health is intimately connected to how you manage your finances,” shares Deborah Johnson Miranda, now a financial coach at Bee Money Coaching.

Spend less than you earn

If she could go back in time, she would tell her younger self to spend less than she earns. “That’s such a basic step and one that I never took seriously. If I didn’t have money for something, I’d just put it on a credit card,” she says.

Have an emergency fund and grow your money

“I wish I knew the importance of saving money for emergencies and travel. I wish someone had explained to me from a younger age the importance of growing money. Perhaps then I would have understood the importance of a retirement plan, that it wasn’t going to hinder my lifestyle,” she adds. “This is why I have been teaching my children the importance of saving. I had the opportunity to contribute to a 401(k) but I thought I couldn’t afford it. I missed out on years of compound interest!”

Control money so it doesn’t control you

Empowerment coach, speaker, author and entrepreneur Palmonia Gordon helps women build the confidence and belief to reach their goals, but in her twenties, she was raising children by herself as an immigrant in a new country. Her advice to her younger self? “Money is a slave, I am the master. I have to command money and put it to work for me.”

Pay yourself first

Gordon also wishes she knew about the age-old principle of paying herself first. “That would have allowed me to have created my ideal retirement life 20 times over before I was 50 years old. When I learned this, my savings exploded. It allowed me to always be happy about my finances because I always had something for me.”

Don’t wait for others to pursue financial goals

“Buy houses and don’t wait on my family, friends or spouse to do something. I waited on my husband for almost ten years to buy a house,” she adds. “I ended up divorcing him twice and he still has not bought one house yet in 2022, more than 25 years later. I made $40K on my first home in two years. I knew no bank had savings like that.”

Pay off high interest debt as soon as you can

“My freshman year at college, I was living paycheck to paycheck and working two jobs. I drove a beat-up rusty red Toyota Celica with the duct tape endeavoring to keep the bottom of the car together. I had barely enough to pay for textbooks and really wanted to buy a university sweatshirt,” shares Jill B. Yesko, owner of Discover Organizing, and co-author of “Chronological Order: The Fine Print for a Large Life.”

“When an attractive young man (wearing the exact sweatshirt I wanted) at the Discover Card table in the crowded bookstore asked if I would like to sign up for a low-interest card to buy what I needed for school, I grabbed a pen. Two thousand dollars and three years later, I was in debt over my head.”

Yesko finally paid off the final sum when she turned 28, adding $1,500 worth of interest to that initial bill in the process. “That’s what happens when you don’t pay off your credit card every month. I remember trying to apply for a credit card to pay for my wedding dress in my twenties, and I was rejected, all because I had been late twice on a Discover Card payment years before.” If you do find yourself in debt and are confused about how to even start, learn about some smart options here.

Shop intentionally

She also learned the importance of intentional shopping. “Avoid building up debt and avoid building up possessions, especially if your space is tight. Debt makes us feel overwhelmed because we don’t have the funds to manage our bills and live the life we want. Like debt, too much clutter around our living spaces makes us feel overwhelmed, and we run out of time to manage all of it – and the room to enjoy our lives.”

“Shopping is fun, but shopping means new stuff. If you’re like most people on this planet, you probably didn’t get rid of the old stuff to make room for the new stuff.”

Keep track of spending

“You may be going from apartment to apartment or from renting to buying. Things change dramatically in your world when you buy a home. Accountability goes way up, along with risk. The mortgage payment is nothing to mess around with, and neither are those student loans,” adds Yesko.

“Lenders get very salty when they’re not paid or not paid on time. If you miss one payment, your credit score is affected for a long period of time. That affects your ability to borrow for that car or get another loan of any kind. If you wanted to apply for that master’s program and needed to borrow, your chances of getting approved or getting a low-interest rate are pretty slim.”

For that reason, keeping track of spending and sticking to a budget is a habit that she wishes she had picked up earlier on. “I think when we hear the word ‘budget’ we think ‘off-limit.’ Yes, this is true. But what’s more empowering is to think of a budget as how you can live within your means and have the life you want to do the things you enjoy.”