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What Would You Tell Your 20-Year Old Self?

The following is a post by staff writer Crystal at Budgeting in the Fun Stuff. Her blog covers living expenses, saving for your future, and the fun stuff along the way.

Since Daniel started his interview series of other bloggers, my favorite question he asks every time is “If you could tell your 20-year old self one thing, what would it be?

Every time I see that question, I think of the huge mistake Mr. BFS and I made when we were 24 years old. I would tell my 20-year old self to fully check out any business venture before jumping in head first. This mistake ultimately led to us losing $12,000.

It all started with befriending the owners of the local board game store. They were nice people and the game store was our favorite hang-out. After a couple of months of playing there on a regular basis and even volunteering to help out, they brought up that their line of credit was running low and they needed a little help just to make it until the summer – they “would be good from there”.

Yes, at this point we should have questioned why they were so behind on their line of credit, but we didn’t. We should have asked for a copy of his credit report, but we didn’t.

When we asked how much they would need to get everything straight, they immediately said that $6,000 would fix it all. With dreams of passive income from a game store on our minds, we cashed in the savings bonds from our grandparents and threw in $3,000 from our own savings. That had to be the quickest $6,000 we ever threw away.

After we invested that first $6,000, we slowly figured out that both of the owners treated cash like water and had no idea what they were doing. They had a maxed out line of credit at around $130,000, a $3,000 loan from Dell that was behind by several months, and another $5,000 personal loan they had never paid anything towards. The incoming money was barely covering the cost of merchandise and utilities. I immediately was handed the check book and asked to set things right.

This is where Mr. BFS and I should have said goodbye and just thanked our lucky stars that we only lost $6000…but we didn’t.

Over the next week, I figured out the numbers and made a payment plan that would technically work if absolutely everything went by the book. You see where this is going, right?

I paid that Dell loan off from our own savings (talked them down from $3,000 to $1,800). We also sunk in another $7,000 over 3 months for merchandise and owed sales taxes. That brought our grand total out of pocket to about $15,000 in 4 months.

The store was indeed recovering and my payment plan was even leading to the bank reopening the line of credit, but then one of the owners over purchased a week’s worth of product despite my reminder, which caused an overdraft on the line of credit. That overdraft was the last straw for the bank and they called the full line of credit due at once. That was a sad end for a good store.

The two owners had to declare bankruptcy since all the loans were due and they didn’t have the cash to cover it. Hubby and I hadn’t touched our home fund, but our emergency fund was hit really hard. After the closing costs and 20% down payment, we only had about $5000 left in all of our savings combined. It was a rough first year and we just crossed our fingers that our house wouldn’t have any major issues. I didn’t want to touch my 401(k). We got very lucky. :-)

That whole situation was a wakeup call for Mr. BFS and me. We are two very smart people who can successfully run a business, but we were way too arrogant and rushed into a very bad situation. We were just too stubborn to back away. Arrogance and stubbornness led to an overall loss of $12,000 since we were able to recover about $3,000 in tax breaks over the following 3 years. I am thankful we didn’t go into debt, but it was definitely the most expensive lesson in humility that I hope to ever have.

What would you tell your 20-year old self? Have you learned any expensive lessons along the way?



  1. I’ve had the good fortune to live entreprenuers all my life (my dad and my mom’s partents). So they have been teaching me about business indirectly since I was tiny. If I ever started heading down a wrong path, they would grab me by the horns and steer me right proper!

    By the time I got to college, I was a seasoned professional at spotting business irregularities. And other such business dealings that could cost me money…

    We did lose almost $1,000 to the health insurance company though. My son had speech issues, and was going to a speech teacher. Initially the insurance covered the costs, but then later stopped paying saying that it wasn’t, leaving us with a $1,000 bill. I called and protested, but they were jerks.

    At that time $1,000 hurt, but didn’t devastate us. This really was caused by the doctor putting the wrong code on the insurance submission form. So I guess I should really be made at the doctor (who later did corect the form, but it was to late by then).

  2. Oy, at least you learned from your experience at a young age and have been able to catch up. It’s hard for me to take much away from this other than learn from your mistakes and hopefully limit the mistakes to small sums of money.

    I’d tell my 20 year old self to start reading a ton of personal finance blogs and learn from other people’s mistakes instead of having to experience the disappointments and stress.

  3. I would tell my 20 year old self about the basics of finances. I would tell me to go to a state college instead of a private college. I would tell me to work more to pay for that education instead of relying 100% on loans. And I would tell me that a credit card was ok, but if a month came when I couldn’t pay the balance and save money at the same time it would be time to put the credit card away. Ahhh, all the things I wish I could have told myself!

  4. The concept of people learning from others mistakes is a good one. In reality, many still feel they can “handle” the problem/issue and plow forward.

    It is sad, that we have to get burned to learn-but just reality!

    Thanks for sharing your story, Crystal

  5. I like Jenna’s Roth IRA idea, but I think I would tell my 20 year old self that failures are stepping stones to new successes.

    • @Joe Plemon, please take this with the sense of humor I see it in, but if I were your 20-year old self, I’d be miffed that you were able to do something as awesome as go back in time, but you only gave me vague assurances, lol. ;-) I’d want lotto ticket numbers or something, hahaha.

      In fact, I’m changing my answer. I’d tell my 20-year old self the winning numbers for the upcoming huge lotto pot, lol. I’d also make sure to tell myself that I should pull out of the market by late 2007. :-) Hehehe.

      • @Budgeting in the Fun Stuff,
        You got me there…I was thinking of myself at 20 – way too cautious to try new things because I was afraid of failure. Now I know that failure isn’t all that bad. But, lightening up to the awesomeness of time travel, how about “invest in Microsoft once PCs are invented”. Note: I was 20 a long time ago. :) Here is another one: don’t buy any life insurance for at least the next 44 years. You won’t need it.

  6. I too have been pondering writing a ‘tell my 20 year old self’ post since I saw the question posed by Daniel in a couple interviews.

    I just have to comment on your business loss. Oh how heartbreaking that would be. I would be carrying a grudge to my grave, which is why I will only live to be 50 or so. :) I am glad you just moved on!

    Sorry you had that experience!

    • @Ken @Spruce Up Your Finances, I was lucky to find out about Roth IRA’s when I was 24…I would have liked to have started saving earlier, but at least only a few years were lost. I didn’t have any money to contribute until I was 22 anyway.

      Time travel would be nice though. :-)

  7. Yikes – that is VERY scary with the personal loan. It’s crazy the difference in psychology of accepting losses vs. recouping gains. That probably was a big “why didn’t…” moment for you two.

    Well, as you noted – at least you didn’t go into debt and you’ve learned a very valuable (and expensive) lesson.

    Have you ever heard the expression: “Youth is wasted on the young”. I’ve been told that before, and I would add the counter-argument “Wealth is wasted on the old”. A little sly, but hey…

    • @FinEngr, there are lots of “why didn’t” moments in my head about this particular scenario. But, it’s all good now. :-) I think that I take full advantage of my youth and look forward to taking full advantage of my wealth in 25-30 years as well, lol.

  8. Althoug losses are painful. I believe every time we make a poor money choice we have an opportunity to learn from that error and hopefully benefit from it in the future. NO one is immune from bad financial mistakes/decisions.

  9. I would tell 20 year old Leslie that she’s damn awesome and not to let anyone tell her different.

    I was a late bloomer when it comes to financial mistakes and was at my financial peak around the age of 20.

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