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When you turn 18, your entire life completely changes and a million new opportunities open up for you. It’s like you’ve spent your entire life in a house that had a room with a locked door and your parents would never let you out, well… that door’s open and you’re free to explore.

The biggest issue with this door finally being open is that we don’t know much about what’s behind the door before it busts open. We aren’t really taught a ton about money in high school which leads most of us to spend our 20s trying to figure it out and making a whole bunch of mistakes along the way.

Since I write about money, I spend a decent amount of time reflecting on my prior financial decisions and wishing there was someone back then who would’ve told me to be a bit less ridiculous with money. That’s why I needed to write this article, with the 10 things I wish I knew about money when I turned 18!

10 Things I Wish I Knew About Money at 18

1. You Don’t Need to Spent It, Just Because You Have It.

When I got my first job at 16, I had a horrible habit of never saving even a penny of my paycheck. I would eat out every single day for lunch, would go to dinner and movies with my friends, and I had a closet filled with beautiful clothes and now I have nothing to show for all of those hard days making coffee for strangers.

When I was 17, I even bought a prom dress for $650 and I paid in cash. I took every single penny I had saved for University and threw it on a dress I wore for one night and none of my photos even came out nice. I would’ve loved that money just 5 months later to pay for textbooks or pencils.

It’s so important to understand that having money doesn’t mean that you need to be spending all of that money. You need to resist the urge for that money to burn a hole in your pocket and to run right out and spend it all.

A great way to combat this is to have a budget, so we wrote an article all about How to Budget for Teens, as well as one about How to Budget as a Student. So, no matter what stage of young adulthood you’re in, you’re covered.

Having a budget will make it so you put at least a little bit of your paycheck into a savings account and start planning for your future. I promise you, you won’t regret it.

2. Get Rich Quick and Overnight Success Aren’t Realistic

When I was 18 years old, I was obsessed with reading stories about people who got rich quick and launched these amazing multi-million dollar companies seemingly overnight. I wanted to find a way to do this for myself so badly and essentially got stuck in a cycle and never did anything.

When we’re young it’s not surprise that we are seriously naive, and that we will believe just about anything we read and we always take it at face value. What those types of articles don’t talk about is how long it actually took for those businesses to grow to where they are today, and all the late nights and hard work that went into it.

If someone is telling you that their business opportunity is a way for you to get rich and it will happen fast, guaranteed, it’s a chance that it’s some type of pyramid scheme and you should stay away. Hard work should always come first. A business where you work hard and take your time will be so much more rewarding.

3. You Don’t Need to Wait Until 30 to Start Saving

When you’re a kid, you see someone in their 20s and you think they have everything in their lives together. You assume they have a house, kids, and a saving account that’s full of money. When I finally grew up, I realized that 99.9% of 20-somethings aren’t like that and most of us have nothing in our savings account.

There’s this magical thing called compound interest that works best if you start young. The more money you put in savings in your 20s, the more money you’ll have when you’re in your 30s, 40s, 50s, and beyond. It’s especially important to start saving money when you’re young because you probably have more disposable income and still live at home, take advantage of this.

4. Your Credit Score Does Matter

Fun fact, I didn’t truly understand the importance of a credit score until I started writing for this blog. I knew I had one, and I knew it did something but I really wasn’t sure what it was for. I feel like most people in their early 20s think like this. Credit scores feel like a more adult thing that we can just avoid.

However, mistakes that you make when you’re 18 can effect your credit for years to come and make it harder for you to get a mortgage or other loans. The first step, is to know you’re credit score, and my favourite place to monitor it is on Credit Sesame. It’s entirely free, and makes it super duper easy for you to figure it out.

If you’re in the place where you don’t understand your credit score and need some help figuring out how to build a credit score, we have a great article for you: How to Build Credit at 18!

5. Bank Fees Were Created by The Devil

For the first 5 years after I turned 18, I was paying $14.99 per month just to have access to my money. Every single month I paid a ton of money to a bank that really didn’t need that money. Banks have more than enough money from interest to survive, they don’t need $10-$20 a month from you as well!

What I didn’t know is that there are a ton of amazing free bank accounts that you can get that have no fees which can save you hundreds of dollars.

If you’re from the United States, we recommend using Ally Bank. I am Canadian, so I have never personally used Ally, but I’ve read a ton of reviews. Always do you research before you sign up for any kind of financial institution.

If you’re Canadian, I will forever recommend Tangerine. It’s an online bank, with no fees, that I’ve been using personally for a few years. And, if you use my orange code 50681730S1 when you sign up, you’ll get $50 for FREE when you deposit your first $100.

6. Pay Yourself First

When I was 18, I would spend every single penny I got before ever thinking about how I should be saving some first. The concept of paying yourself first was lost on me, and this is one of my biggest regrets.

Paying yourself first means that you put money into your savings or work on paying off your debt before you buy yourself anything. No new clothes, no eating out, not unless you’ve put some money towards some of your financial priorities.

Remembering to pay yourself first is one of the smartest things you can do for your financial future, and will change the way you think of money!

7. Maxing Out a Credit Card to Drink Isn’t Cool

Just because you have a credit card, doesn’t mean you always need to use it… especially not for booze. There were numerous times in school when I’d go buy an entire new outfit and some new make up just because one of my friends wanted to go out drinking.

Then I’d spend the little money I had left on a cab to get downtown, and put all of the drinks on a credit card. I felt like I was invincible. I kinda forgot that you have to pay back this money someday.

You definitely don’t have to go out drinking every single time your friends want to, and you can stay home and just eat ice cream in your pjs on a Saturday. There are so many better uses for your money than alcohol.

8. Diversification of Income Makes Everything Less Stressful

In my first few years of employment, I was always stressed because my hours at work were very inconsistent and I was living insanely above my means. If I was working 20 hours a week, I’d often be spending like I was working 30 and it caught up to me really fast.

I really wish I would’ve understood that it’s possible to diversify your income and make money fly in from more than one place, instead of just being a slave to your day job. You can get a side hustle that could even make you more money than you make from a day job!

Here’s a couple articles about making money on the side you should definitely check out:

9. Money is a Tool and Should Be Used as One

I used to think that the only reason to have money was to spend money and boy was I wrong. I’ve recently learned how powerful money can be and all of things it can do for you. Money can give you freedom, and financial freedom can lead to happiness and a truly satisfying and stress free life.

I often wonder about where I would be if I would’ve understood this and invested some of my money at a young age. Maybe I’d be living on a beach somewhere (maybe a bitcoin investment? haha). Money can be used as a powerful tool to help you reach your goals quicker.

10. You don’t need to go broke to make yourself look rich

This is something I still have to remind myself of today. There are so many people out there wearing their college tuition on their wrist with their expensive jewelry or expensive (and usually ugly) shoes.

I’ve been known from time to time to spend hours looking at expensive clothes and shoes online and totally considered spending $500 on something I totally don’t need. I wish I understood back then that it’s totally okay to shop at walmart and forever 21, who gives a hoot what other people think!

Final Thoughts

When we turn 18, we’re pretty stupid. I won’t sugar coat that. We’re dumb. However, one of the absolute best ways to learn is to make mistakes, so making money mistakes at a young age can help you learn to not do the same silly things when the stakes are bigger!