Maybe spending all that money in my 20s was a good thing

Published June 10, 2015   Posted in How to Save

With all this talk about early retirement and the hilarious financial mistakes that I made in an earlier life, it is tough to consider the possibility that maybe, just maybe, all that money that I recklessly blew through in my 20s might actually turn into a good thing.

A pile of moneyI have written before about how imperfect I truly am.  Throughout my life, I have made some pretty common financial mistakes that I am literally paying for to this day.  While I never saddled myself with high interest credit card debt, my spending habits were, shall we say, less than frugal.

For example, a year out of college I bought a used Corvette convertible for $25k, which happened to be just under a half year’s salary at the time.  Just months out of college and BOOM, I had already blown through nearly half of my salary.

I also thought about my budget all wrong.  Yes, I actually had a budget, but in some ways it was enabling me to spend more money because I thought of the money in each budget category as money that I should be spending rather than the upper limit of what CAN be spent should the need arise.

For example, if I had an extra couple hundred in one of my “fun money” pots, I made guilt-free purchases of completely unnecessary bullshit.  A new camera here.  A supercharger for my Vette there.  And hell, who didn’t need an Xbox 360?  I mean, come on…

I also went out to eat…like, a lot.  I went out to eat with my roommate generally two times a day, every day.  We grabbed lunch during the day because we worked together, then went out for dinner, sometimes driving 30 miles or more to get to the place that we wanted to go.

The fact is I knew that the cost of all this eating out was adding up, but I did not care.  When you’re in your 20s, it is typical to throw caution to the wind and have some fun with the money that you’re now making.  At that point in my life, I truly did “live a little” as defined by the typical societal definition of the phrase.

And while I am looking back at all this as examples of what I should not have done, I also can’t help but think how glad that I am to put all that behind me and move on.  I know what it is like to spend heavy.  I’m glad that I went through it.

That experience taught me that spending large amounts of money does not bring me the happiness than I expected.

Get spending out of your system

Learning from your mistakes is the very best way to not repeat them, right?  I tend to agree with this statement, but there is a very important key in the reality of how this phrase works for the majority of us.

We have to make mistakes first.  Then, we learn.

Maybe my spending habits back in my 20s are helping me to save more today.  I learned first hand that more spending on frivolous crap does not bring the happiness that we expect, and I have definitely taken steps to turn that ship the-hell around.  Been there, done that.  I know it doesn’t work.

Maybe, just maybe, I got all that spending out of my system when I was younger, allowing me to not only put those habits behind me and move on, but also enabling me to recognize when my spending might be getting more frivolous today.

Had I not spent like a sailor in my 20s, it rings as possible to me that I’d still be spending a lot more today than I currently am because I would not yet have learned that typical American spending brings nothing but debt to so many people.

Of course, one could make the argument that if I saved more in my 20s instead of spend like I did, I may have a net worth now that would enable me to retire even sooner than 2018.

And while that may be true, the lesson of money, and what ultimately buys true happiness, would probably still remain unlearned.

Based on my spending in my 20s, I have a powerful and substantial foundational understanding of what brings me true happiness.  If I were a person who just naturally spends less and saves more, I probably would not have learned that lesson at such a young age.

And as a result, I may very well have learned that lesson, the hard way, later in life after retirement.  Perhaps it would come in the “mid-life crisis” phase that gets people thinking about their lives and realizing that they probably won’t go down in the history books after all for some great accomplishment.

I know myself.  Sometimes I’m a hard learning – I need to touch, feel and experience things in our world before I truly understand them…or, perhaps more appropriately said, before I am willing to accept them.

Today, I know that installing a supercharger in my truck won’t bring me true happiness.  I understand that the latest cell phone or video game console will probably just sit there collecting dust.  I now realize that spending every dollar of our budget is a great way to waste money, even though it may technically be “budgeted for”.

I understand all these pitfalls because, well, I’ve fallen into each and every one of their traps.  I’ve made all of these mistakes, repeatedly.

I have learned from those mistakes…mistakes that are now very much in my past.  Today I have moved on to bigger and better things, and my pocketbook is much happier because of it.

So is my future self.

We track our net worth using Personal Capital



Comments

15 responses to “Maybe spending all that money in my 20s was a good thing”

  1. I tend to agree with you. I don’t regret spending money when I was straight out of college. I righted the ship pretty early (by the time I was 26). So maybe I spent to much money on trips with the boys and bars, oh well, life goes on. I’m a glass half full kind of guy 🙂

    • Steve says:

      Hey Fervent,

      Yup, looks like we’re definitely on the same page. The key is to learn from our mistakes so we don’t repeat them. You’ve definitely done that.

      Glass half full for sure! 🙂

  2. Stockbeard says:

    In a similar fashion, I made a terrible investment choice about 3 years ago. This motivated me to look for much better investments and understand taxes, stocks, etc… better than my former self.

    My mistake cost me $15000, but today I’m probably better off than if I hadn’t made the mistake.

    Learning through error is extremely powerful, I think

    • Steve says:

      Hey Stockbeard,

      Costly mistake, but like you said, you’re making the best of it now and it might have better prepared you for the rest of your life. Definitely interesting how things like that can happen, especially if you look at things with a positive lens, which you certainly do.

      Thanks for stopping by.

  3. Jen says:

    I really enjoyed reading this! My husband and I did the same thing! It’s too bad we can’t go back in time knowing what we know now. We would have already become millionaires! The important thing is that we learned from our mistakes and are now investing every dollar we earn. We keep everything small…our house, cars, and keep our stuff to a minimum. Great post!

    • Steve says:

      Hi Jen,

      I agree that learning from your mistakes is so very important, and is the only thing standing between us and essentially making those very mistakes all over again.

      Congrats for keeping things small. Life becomes much more simpler, that way, eh? 🙂

      Thanks for reading.

  4. Funny that we wrote similar posts on the same day! We’ve actually wondered, if we were just frugal now and hadn’t had a baller phase, would we always wonder if spending more would make us happy? Maybe it’s a dumb question, but grass is always greener, right? Like you, we’re happy that we know the answer because we’ve lived it. And while we love some of the memories from the salad days, we don’t need to repeat them.

    • Steve says:

      Great minds think alike! Agreed that while the memories of some of all this spending are sweet, there really isn’t any reason to do that again. It all provided temporary happiness, at best. Thankfully, it is all out of my system, and now we can focus solely on quitting the rat race as soon as humanly possible. 🙂

  5. I definitely agree that some people really need to have that experience of overspending and reevaluating in order to put their future in perspective. I’m glad my husband and I never got really crazy with our expenditures, but if that method leads others down the path to financial frugality then more power to them! It’s also something to think about and discuss once you have kids who are trying to find their way with money (the spender vs saver and how you react to their decisions).

    • Steve says:

      It sure is interesting how that all works…that making mistakes like overspending often turns into one of the best ways to put everything into perspective. While it’s true that you don’t want to get TOO FAR off the deep end before you finally learn. But once you do, the rest of your life instantly becomes that much easier!

      Thanks for reading. 🙂

  6. Ed Mills says:

    Yes, most of us have all made some really bad financial mistakes. In our own case, we had to flounder financially for decades before we learned, internalized, and acted on our financial lessons. Crying in our beer about what might have been won’t help us now, but planning for our future now will yield incredible results down the road. Our financial overall has also helped improve our day-to-day lives as well since we now have a sense of financial control in our lives. It’s funny how planning for the future can lead to improved living in the present. My wife and I are very thankful that we eventually “saw the light” and took charge of our finances.

    • Steve says:

      Hi Ed!

      Congrats on taking charge of your finances – too few do that, and far too many suffer the long term consequences of it if not corrected. It all comes down to the ability to admit your mistakes and learn from them, and it looks like you have done just that.

      Well done, and keep fighting the good financial fight.

  7. Chris Muller says:

    Our 20s are such a critical time to learn about money, and it’s crazy how we don’t think about the mistakes as we’re actually making them. I’ve personally found my 20s to be a cornerstone in learning about money, THROUGH mistakes. The only part that sucks, though, is you have to rebound in your 30s once you learn. Nice post Steve -thanks for sharing 😀

  8. Steve, another great post! This describes our old selves to a T. I’m glad we have turned around our ways and are heading down a path of sensible spending to an early retirement, but look at our past as a learning experience. It wasn’t all bad, though… we have a lot of outdoor gear to show for it!

    P.S. – Thanks for the mention the other day!

    -Mr. Retire by 35

  9. […] I have written about before, knowing what you’re missing has unique advantages. Those mistakes you made in a previous […]

Leave a Reply