What One Financial Expert Would Tell Her 20-Something Self (2024)

Because even when you're a money professional, you make a few mistakes.

By Bola Sokunbi August 21, 2017

My journey to building wealth really started after I graduated from college—when I first started earning a real income and became truly independent.

I moved out of my parents’ house, bought a condo, got a car, and basically began funding my life, all on my own.

As a young independent woman, I've made a number of money mistakes and also had a number of financial successes. Based on those experiences, here’s what I would tell my younger self if I could.

Max Out Your Retirement Savings

When I started working at my first job, I had no idea what a 401(k) was. All I knew was that I was being offered free money via a contribution match and I was all about "free.”

I contributed just enough to get the match to start out and then gradually increased my contributions over time until I eventually started maxing out my retirement contributions a few years later.

If I had maxed out my contributions right away, I would have certainly saved more money and been able to take advantage of the power of compounding. It wasn't until I started learning about how investing works that I realized how worthwhile contributing to my retirement accounts could be.

If I could go back, I would have made it my mission to educate myself much earlier and max out as soon as I was eligible to start contributing to my employer-sponsored retirement savings account.

Get Life Insurance

For many people, talk of life insurance immediately leads to morbid thoughts. When I was younger, I was one of those people who thought having life insurance was similar to planning your own funeral. I was young and healthy with zero plans to die anytime soon, so why get insurance?

Now that I'm older, I fully understand the importance of having life insurance—especially the type of life insurance that has living benefits (in the event of a critical illness that requires expensive care) and cash value that I can get any time before or after I retire (another way to diversify my long term financial portfolio).

Now I have life insurance but if I had gotten it in my 20s, my premiums would have been so much cheaper, and I would have accumulated a lot more cash value. Now in my 30s? I have to pay a lot more. Still worth it, but lesson learned.

Don't Keep So Much Money In Cash

Ah yes, there is such a thing as too much cash! Right after college one of my big financial accomplishments was saving more than$100,000 in a little over three years. More than $50,000 of it was money that I kept in a savings account that earnedme a pitiful amount of interest.

I had by far exceeded whatI needed to have in emergency savings. I should’ve invested much more of my money as opposed to letting so much of it sit in cash. I eventually did get into non-retirement investing a few years later, but if I had started sooner, my money would have had even more time to grow in the stock market.

That being said, I am now a huge fan of investing for the long term, and I make sure I don't keep excessive amounts of cash (outside of my emergency fund)sitting around in low-interest savings accounts when that money can be working hard for me in the stock market.