My 5 Biggest Money Mistakes

I made plenty of money mistakes when I was young, along with some generally bad decisions.

At one point, my finances were a mess. I lived in my overdraft, carried credit card debt, had two car loans and was quickly building up student loans.

I was 20. In two years of being an adult, I’d got myself deep into the red.

I remember feeling stressed and anxious about money. I wanted to pay back what I owed, but as daft as it sounds, I didn’t know how. I’d had no financial education at all.

Proof: when I got paid, I’d spend the lot on designer clothes and big nights out instead of paying off debt. My hangovers came with a real fear of checking my (already negative) bank balance.

My older, wiser self regrets the money I wasted. But I’m also grateful for the lessons, and I had a lot of fun along the way.

If I could do it all again, here are the money mistakes I’d avoid.

1. Buying cars on finance

Saving up for a decent car can take months or years. Most people don’t have that much cash, so buying on finance is common. But there’s a smart way and a dumb way to do it.

I chose the dumb way. Instead of a cheap personal loan at around 3% APR, I took the dealer’s finance at 9%.

Then I picked a sleek gunmetal hatchback with big alloys, a spoiler and a subwoofer that shook the windows. The salesman agreed it was a great car and said we should sign quickly before someone else snapped it up.

Less than a year later, I wrote it off.

Instead of using my small savings to buy a cheap replacement, I went straight back to the dealer and took out another loan on a sporty little number. It took me years to pay off both loans.

Looking back, I wish I’d searched Gumtree or the local classifieds for an old banger. It would have saved me thousands and done the same job: getting me to work and back.

Took out car finance between 2007 and 2024? You may be owed money. The FCA’s motor finance redress scheme covers about 12 million agreements taken out between 6 April 2007 and 1 November 2024, with an average payout of around £830. Lenders will contact people they think are owed money. You can also complain to your lender directly, for free, without using a claims firm.

2. Carrying a credit card balance

To get my first credit card, I had to meet an adviser at my local bank. I dressed smartly, spoke politely and calmly explained how I’d use the credit.

That maturity vanished the moment the card landed on my doormat. I maxed it out within days. I can’t remember what I bought, but I’m sure it was rubbish.

I carried a balance for years and only ever made the minimum payment. I’d probably cry if I added up the interest I paid.

The lesson: if you pay only the minimum, you can stay in debt for years and pay back far more than you borrowed. Set up a direct debit to clear the full balance every month, or at least pay a fixed amount well above the minimum.

3. Keeping up with the Joneses

Keeping up with the Joneses isn’t just a middle-class habit. In my experience, teenagers and young adults are even more prone to it.

When I was younger, I talked, acted and dressed like my mates. We were carbon copies of each other, right down to the same terrible haircuts.

Everyone does this to some extent. People need to feel they belong. But following the herd really hurt my bank balance.

I’d spend £100 on a Lacoste polo shirt to look the part. I’d go on nights out I couldn’t afford because of FOMO. If one of us bought a new TV, it wasn’t long before we all had one on the wall.

I was living a life I couldn’t afford, as were all my friends, to impress the group.

Now I couldn’t care less what my mates think of my car or my clothes. Real friends stick with you whatever you do for a living, where you live or what you drive. I just wish I’d learned that sooner.

4. Not budgeting

“Budgeting apps didn’t exist back in my day,” he says, rocking in his chair and sucking on a Werther’s Original.

Back then, I wasn’t the money nerd I am now and would never have tracked my finances in a spreadsheet. But that’s no excuse for burying my head in the sand.

A lot of my money trouble could have been avoided if I’d spent five minutes writing down my income and spending each month and planning how to spend my money.

You don’t need to be a maths genius to see that a part-time café wage wasn’t going to cover rent, food, bills and tequila shots for the whole bar.

5. Not learning about personal finance sooner

We all have something we wish we’d started sooner. Saving? Investing? Golf? Mine is managing money.

I was 22 before I finally got wise to personal finance. That’s still young, but if someone had handed me Rich Dad Poor Dad at 16, I’m sure I’d be much further ahead now.

Then again, I might have been too young to take it in. In the end, a self-help book changed my outlook. It came at exactly the right time: I was tired of being skint, tired of hangovers and ready to get a “real job”.

One book led to another, and soon I was deep into self-development. Somewhere along the way, I started reading personal finance and wealth-building books. As cheesy as it sounds, they changed my life.

It took several years to sort out my finances, but I’m glad I did. If I’d stayed on the path I was on, I’d be buried under a mountain of debt today.

Care to share?

I hope you’ve had a laugh at my money mistakes. They’re a bit ironic coming from a personal finance blogger who writes about being good with money. But nobody’s perfect, and we all have regrets.

If you learn from your mistakes and they make you a better version of yourself, they can be worth making.

Now it’s your turn. Are you brave enough to share your money mistakes, and what you learned, in the comments?

If you’re struggling with debt right now, free and confidential help is available from StepChange and MoneyHelper.