Your 20s are an exciting time and you want to have fun and experience as much as you can, but it's also an instrumental period in regards to building your future.
Any big spending may be seen as somewhat foolish when you don't have a lot of money, however, you can spend foolishly ... on wise things.
Here is when to spend money foolishly in your 20s (and when not to).
Where to spend your money
Education is the most important investment you can make. I paid my way through college with student loans that I am still paying off, however, it was worth every penny. Even if you do not find formal education appealing, you can still use your money to pay for instructional books, online classes, vocational school, certification, etc.
I firmly believe in the quote, "Traveling is the only thing you buy that makes you richer." Go see the world while you are young and still believe that you can change it. Getting away is one of the best ways to recharge your tired batteries. Traveling becomes much more expensive and difficult when you get older and have a family to take with you, so the sooner the better.
Spend your money foolishly on experiences you won't forget with the people that matter. This means attending concerts, sporting games, nice restaurants, or whatever else you find fun. You might be able to hold on to your material possessions for a while, but you will hold on to great memories for the rest of your life.
Money invested in your health and wellness is always well-spent. Get a gym membership and force yourself to use it. Buying nice workout clothes is also a good way to motivate you to get to the gym. If normal gyms aren't your thing, try an MMA gym or a Crossfit box. Spend a little extra and buy healthy foods and vitamins to add years to your life.
Want to know what's better than spending or saving money? Using it to make more money. You can make risky investments in start-ups or stocks that can potentially yield big gains, or you can take less risk by investing in a 401k or IRA. Your 20s are a great time to start building wealth because the compounding power of time is on your side.
Where not to spend your money
I am all for going out and buying a round of drinks for your friends, however, I believe you should limit excessive alcohol purchases to special events and celebrations. Getting bottle service with your friends every weekend "just because" is an easy way to burn through all of your hard-earned money.
2. Overpriced clothes
Dressing sharp is an easy way to exert confidence and style, but you don't have to break the bank in order to do so. Buying designer brands at full price isn't necessary in order to look good. Don't spend outside your means when it comes to clothing. Plus, there is nothing wrong with purchasing clothes on sale.
3. Technology you don't need
Unless you're super passionate about technology, you really shouldn't be trying to keep up with the Jetsons. I am a technology entrepreneur and I only get new phones when I have an upgrade and only purchase new laptops when mine break. Make sure you have the technology you need to be successful in work, in school, or in life, but try not to constantly replace non-obsolete gadgets.
4. A brand new car
Contrary to what you may have been told, cars are not investments. The second you drive a new car off the lot it depreciates up to 10%. If you want to buy a new car, buy an almost new one that someone else just drove off the lot a year ago. You can save thousands by buying a car with only a few thousand miles on it.
If you're in a serious, committed relationship, there is nothing wrong with spoiling your girl from time to time. However, when you first start dating someone, be careful how much money you spend. Never try to use your money to buy a woman's interest and try to avoid purchasing gifts early on. When you do spend money, it should be on dates and events that will create memories.
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