The Personal Finance Letter I'd Write to My Younger Self

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Dear Sweet, Naive, Handsome Mikey:

You're going to be a real idiot with your money in your 20s.

So many people will tell you how to handle your finances better — more responsibly, even — but you won't care. Because you think you know everything. You think that because you're only 20-something, you don't have to worry about how much you're spending or how much you're not saving. But trust me, your reckless financial abandonment will catch up with you, and you'll want to crawl under a rock and disappear when it does.

Alas, the debt you'll rack up won't just disappear because you want it to. It's going to follow you around like a black cloud for years. Everywhere you go. Everywhere! You can lessen some of this unnecessary stress, however, if you avoid these five missteps (even though I know you're going to do them anyway because you won't listen to anybody, not even yourself.)

1. Do Not Accept Those Credit Card Offers Straight Out of High School

Heads up. As soon as you turn 18, credit card companies will call you and address you like you're somebody important. They'll tell you that you can have free money to take your friends out to dinner, take your boyfriend to the movies, and to go shopping. And we both know how much you love to go shopping. But as appealing as this sounds, buddy, be strong and just say no — because it's a trap — a 23%-interest trap.

You're going to max those cards out in six months, but it's going to take you six years to pay them off. In fact, you're going to pay more in late fees and interest than the actual amount you spent. As a result, your credit will be jacked up for most of your 20s. It'll be difficult to rent an apartment and buy a car, milestones that other people your age are having an easier time with because they didn't treat their credit cards like they just won the Mega Millions jackpot.

It'll help if you think of your credit cards this way: You were broke before them, and when you get them, you're still broke. Because you don't have the money to pay for them! You're virtually penniless, young, handsome Mikey. Street-corner vagabonds shaking change cups have more money to their name that you do. The net worth of your eight-year-old neighbor who just celebrated a birthday is higher than yours. Finding a shiny quarter on the ground will make you 25% richer than you were before.

Get what I'm saying?

2. Stop Spending Money Within Cents of Overdrafting Your Account

A zero balance in your bank account isn't the amount you're striving to reach. It's not a goal or a "caution" amount. A zero balance means you're Oliver Twist poor, teetering on the brink of begging for scraps outside a California Pizza Kitchen just to stay fed. Frankly, it's a good thing you have room and board at college, thanks in part to the United States government. But the joke's on you. Because while you're spending every dollar you earn working semi-part time, and then money that you don't even have, the government is laughing all the way to the bank because it knows it's got you on the hook for the next 20 years.

Rein it in.

3. Put More Emphasis on Saving So Your Grandma Doesn't Have to Win You Money at the Casino

Yeah, Mom-Mom likes to go to Atlantic City, but that doesn't mean she wants to hand over all her winnings to help you fix your car because you have a minus sign in front of your entire life. Shop less, eat more at home, and pick up another job so you can be an adult for once and pay for your own mistakes. Seriously, dude — who wants to be 25 years old calling up Granny for cash because they're acting a fool? You're better than that. Hopefully.

4. For the Love of God, Quit Drinking Away Your Paycheck

You like to have fun — I get it. But at what price? Spending half your salary on booze (which, by the way, at age 27 is a very good salary by any estimation; count your blessings) is not only irresponsible, it will lead to other problems in the near future. Lack of savings or anything of substance of which to be proud notwithstanding, you're in danger of developing a real drinking problem. You can avoid the severe pain that this will cause you and your family and friends for years to come if you can learn to stay out of the bar on Friday and Saturday nights.

You don't enjoy waking up every Sunday with a massive hangover. I should know. I did it for a long time. But you don't have to if you heed this advice as a serious health warning that could have life-or-death consequences.

5. Steer Clear of the Beaten Path and Everything Will Be Okay

At some point, everyone you care about will have an opinion about your future. You can't be mad about that though, because you created a situation where people became concerned. As much as they mean well, however, don't always listen to them. You will make lots of mistakes, but one of your strong suits is following your instincts. Your intuition, work ethic, entrepreneurial spirit, and built-in business acumen will serve you well once you get all this adolescent immaturity out of your system.

You'll go farther faster if you cut all this crap out earlier, which I implore you to do, because who knows — I could be writing this letter from a corner office in Manhattan right now or on a bright, sunny beach on a weekday. But you'll only live up to your potential if you allow yourself to make your mistakes, learn and grow from them, and press on ever determined. What will happen when you're young will happen, but your future is still being written. Be bold, take risks, and get your financial self back on track sooner than later and you'll be pleasantly surprised with the outcome.

Good luck, pal, and Godspeed,

The Better and Even Handsomer You