The 5 Worst Purchases You Can Make in Your 20s

Alyssa Atkinson

They will set you up to struggle later.

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Photo by Vlad Tchompalov on Unsplash

I got my first job at about 16 years old as a part-time basketball referee. I expected it to be extremely boring, but I was pleasantly surprised when I found that I actually enjoyed it. I had played basketball since I was about five years old and I only had to work weekends, so it truly felt like a fun hobby to keep me busy on Saturday and Sunday.

At the time, I had no living expenses. I didn’t have to set aside money for groceries, insurance, wifi, or utilities. While I did save a good portion of each paycheck, I also spent quite a bit on frivolous material goods that brought me short-term satisfaction, but nothing more.

Once I graduated high school, I got a full-time summer job before I headed off to college. I worked from 9–5 for minimum wage (which was $8.10 per hour at the time), and it was a grind that left me exhausted at the end of each week. However, by this time, I was more mature, less materialistic, and I saved every penny that I could.

I began to understand the importance of saving more money than you think you need, because at some point, you’ll eventually end up in a situation where you feel lucky to have it.

For instance, when I was in college, my car was towed from my own apartment complex parking lot, because I hadn’t updated my parking spot sticker when the new year rolled around on January first. This was incredibly dumb of me, but in my defense, I had no idea I was supposed to renew it. I paid $200 cash to get my car back, and I still wince at the thought of that costly mistake to this day.

I think we all can admit that we’ve made some unnecessary purchases throughout our lives. Thus, here are five of the worst purchases you can make in your 20's, some of which I have (unfortunately) bought myself.

1. Designer Fashion Pieces

I have to admit that I’ve purchased designer pieces in the past. They weren’t insanely expensive (I bought a navy blue designer wallet for $50, and a couple pairs of designer shoes for $100 each), but I wouldn’t waste that kind of money on them today. I never got much use out of them, they’ve all depreciated in value immensely, and they didn’t bring me any joy beyond the initial thrill of the purchase.

If you spend every paycheck you make on designer clothing, handbags, and the like, you won’t have money saved up for when your car breaks down, your rent gets bumped up, or your utility bill is unusually high.

While you may be tempted to fit in with a certain crowd or dress in brand name pieces from head to toe, it’s probably not the wisest way to spend your money. Instead, tuck that money away in your savings account. You’ll be thankful you have it later.

2. The Following Living Space

While it might be tempting to rent a nice, luxury apartment if you make good money, it’s probably not the best way to spend it. When you really think about it, that money essentially goes down the drain.

Of course, you have to have a place to live, and you might not be ready to buy a house in your twenties. However, a good apartment in a safe area doesn’t have to be insanely expensive.

In fact, a cost-effective apartment could be the best route for you:

“If you have student loans or credit card debt to stomp out, consider your apartment your stomping ground. Unless your rent is devouring too much of your paycheck — in which case you should probably find a cheaper apartment — renting can offer you the opportunity to get out of debt and save.”

When you pay for all the extra bells and whistles — like an incredible view, a prime location in the heart of the city, a bigger space, and the latest and greatest technology, the expenses add up fast.

Even if you can afford these features, you won’t really get anything in return, because you’ll never own that apartment. You’ll likely be better off if you save or invest that money, so you have to ask yourself what you actually need in an apartment, and what you can live without.

3. This Classic Beverage

Coffee is another expense that can add up fast. I love coffee, and I’m an avid drinker. I’ll often have two or three cups a day. And when I first entered my twenties, I would occasionally pop into a shop and buy a cup. In reality, this was very wasteful, and I should have just made my coffee at home.

I honestly think my homemade coffee tastes just as good, if not better. When I used to go to coffee shops, I typically bought my coffee and left. If I had sat there, worked for a few hours, and enjoyed the atmosphere, I could have probably justified the cost a bit more.

Sadly, I’m not alone in this habit. In fact,

“forty-one percent of millennials admitted they spent more on coffee last year than they invested in their retirement account.”

The truth is, I was just lazy, and I had the privilege to waste a few dollars on a coffee every once in a while. Now, I almost always make my coffee at home, and I feel good knowing that I have cut out an unnecessary cost that I personally couldn’t justify.

4. Debt Avoidance

This one is technically a lack of a purchase. Essentially, what I mean here is when you allow debt to mount up by choice. I am not referring to a situation where you are unable to pay off your debt.

If you make enough to cover all your living costs and you have money left over, it is crucial that you use some of that extra money to pay off your debt. This is because the loans you took out for school or the charges you put on your credit card likely accrue monthly interest.

Thus, if you don’t make a payment each month, your debt will continue to rise because of the interest costs. Unfortunately, most students do graduate college with student loan debt.

Business Insider states that:

“The average college graduate in 2016 left school with $37,172 in student loan debt.”

Therefore, the best approach is to focus on clearing those debts so you can get rid of them once and for all, and eventually start to build up your savings.

5. A Brand New Luxury Vehicle

I have a few friends who secured a high paying job, and immediately purchased a brand new luxury vehicle. Along with it came a hefty monthly payment.

Now, you might think this isn’t a big deal so long as they can afford it, but consider this. If you bought a brand new Tesla Model S in 2015, it would be valued at about $40,000 today.

If you had invested that $40,000 in Tesla stock instead, it would be worth over $350,000 today.

Now, this is obviously just one example. There are other factors at play, like the high risk associated with a single investment of that magnitude. The point is, that money could be better spent on something potentially lucrative rather than a luxury vehicle which will depreciate over time.

Furthermore, if you can barely cover your monthly expenses, it’s certainly not a good idea to take on a huge monthly car payment. Instead, shop for something more affordable that is well within your budget.

Final Thoughts

Your self worth isn’t defined by the car you drive, the clothes you wear, or how expensive your lifestyle appears to be. It’s measured by your character, how you treat others, your work ethic, etc. Luckily, all of these things are free.

While I certainly fell into the trap of buying designer pieces and coffees to-go in my early twenties, I’ve gradually started to spend less and less, and as a result, I’ve been able to save more.

It may be difficult to drastically change your lifestyle, but that extra $200 you save here or there adds up quickly. In the end, you’ll be happy to see how much your bank account has grown as a result of the sacrifices you made.

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Ohio U XC/Track alum. I love to run. I blog about food, health, fitness, lifestyle, etc. Personal Blog - nomeatfastfeet.com | Electrical and Computer Engineering Grad.

Raleigh, NC
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