When you develop an interest in personal finance, it’s easy to fall into the trap of thinking good money management is all about saving.
I’m all for cutting out frivolous purchases, but beware of adopting a scarcity mindset. If you obsess over saving money at all costs, you could limit your ability to make money.
Entrepreneurs invest in their businesses. Why wouldn’t you invest in yourself? The same principle applies: spending an extra few hundred dollars a month could help you earn a thousand dollars more, making you better off rather than worse off.
Most importantly, it will increase your quality of life too.
With that in mind, here are the nine smartest purchases I made in my twenties.
Did you know the average person spends 26 years asleep?
That seems like an excellent reason to make sleep a priority. Yet so few people do – not only do we regularly deprive ourselves of shut-eye, we scrimp on mattresses.
Sleeping enough isn’t all that matters; we need to sleep well, too. Even amongst people who sleep eight hours a night, those who get high-quality sleep are the least likely to develop a cold.
What’s an easy way to guarantee a good night’s sleep? Buy an amazing mattress.
Yet I constantly see people choosing the cheapest option possible. Or worse, refusing to upgrade a mattress so old that it’s probably been passed down their family for generations.
I’m not saying you should buy the latest organic latex mattress, or whatever constitutes the greatest luxury. If you need to go on a payment plan to afford something, then it’s probably a terrible idea.
But spending around $500 on a new mattress improved my sleep by leaps and bounds. It might not be an obvious “investment” to make, but I’d consider it one of my smartest purchases.
Hear me out on this one. You might think splashing out on looking good is the definition of wasting money, but it’s more nuanced than that.
Spending money on your appearance doesn’t always make you vain, superficial, or insecure. Well-dressed people tend to make a better first impression and receive more opportunities.
Not just that – they feel more confident in themselves, which helps them think bigger and achieve more.
Yes, there will always be exceptions to the rule, but I’d rather ditch the sweatpants and give myself the best chance of success.
So, what are the most valuable ways we can invest in our appearance? I’d recommend all guys to buy an expensive suit that leaves you feeling a million bucks. Spending that bit extra can take you from feeling like a kid playing dress up to a man who means business.
The same principle applies to women – have one go-to outfit you can rely on to make you feel and look great.
The best part is that these more expensive items last so long they might end up saving you money in the long run. If you don’t enjoy shopping much, having every interview and networking event outfit sorted for the next decade sounds pretty appealing!
Of course, appearance doesn’t start and end with clothes. Smaller details like having a good haircut and personal hygiene are important too – and more affordable.
If you make all your money from a salary job, you probably won’t need an accountant. Your tax form should be simple enough to fill out with the help of software – depending on which country you’re from, you might not even need to complete a tax form at all.
But if you’re a business owner of any type, refusing to spend money on an accountant is just about the dumbest thing you could do.
It’s tempting to scrimp, especially if you’re just starting out and your profits aren’t very high. In reality, it’s likely to cost you more than it saves.
Hiring an accountant saved me $23,000 last year – ask any business owner how much their accountant saved them, and I guarantee they’ll tell you a similar story. Now you know why their hourly rates are so high!
Accountants help you to structure your business optimally for tax purposes, find tax write-offs, and work with the IRS (or relevant tax authority in your country). You could try to do this yourself. But you’ll probably just end up making mistakes and missing out on key ways to save money, as well as wasting your valuable time. Delegation is key.
If your eyes are watering at the prospect of spending thousands on a new suit, mattress, and an accountant’s salary, here’s something that people on pretty much any budget can afford to invest in: a virtual private network, or VPN.
Just because you don’t understand exactly what a VPN is or how they work, that doesn’t mean you don’t need one. Essentially, they’re just a way of adding an extra layer of security.
Whenever you use public WiFi, you’re an easy target for hackers without a VPN. Few things are more catastrophic than having your identity or money stolen, so a VPN isn’t something you should pass on.
As if protecting yourself from identity theft and hacking wasn’t enough, a VPN comes in handy for countless other situations too. Some websites don’t allow traffic from certain countries, and some countries don’t allow you to visit certain websites. However, a VPN can “trick” them into thinking you’re in a different country, so you can access the site you need when you need it.
I use NordVPN, which you can often use for as little as $3 a month when there’s a deal on.
Buying electronics is a controversial topic within the personal finance sphere. Upgrading your gadgets to the flashiest, newest model every year is a poor financial decision – but so is using a model that crashes twice a day.
I used to be one of those people who insisted on using a cheap phone and laptop, but I’ve since realized that my past stubbornness cost me a lot of time. Don’t estimate the impact reliable, high-functioning gadgets have on your life!
We adjust to the technology we use every day, so having a computer that becomes unresponsive constantly begins to feel normal. You shouldn’t have to live like that! Once you upgrade, you won’t believe you wasted so much time on unnecessary hassle.
Besides, there are certain situations where unreliable tech can put you in real trouble. Imagine being lost in a city halfway across the world and not being able to open GoogleMaps or call an Uber.
If nothing else, it’s worth paying more for the battery life alone. Having a laptop that won’t die within half an hour if you don’t charge it means you can work on the move – a real game changer.
Yes, technology again. There’s no good reason to not invest in an external hard drive – for a small price (less than $100), you can guarantee that a lifetime’s worth of memories and work will remain protected.
You might think you don’t need extra backup now we have the likes of GoogleDrive or OneDrive. But even if you trust these services 100%, you can’t overlook the possibility of human error.
Google might not delete your files by accident and then remove them from the trash folder too. But you might. Or a virus, hacker, or your crazy ex you forgot still has your login details might.
Why take the risk?
I was careless with this in the past and lost a lot of my personal files, so now I’m more cautious than anyone else I know. I even back up my back-up!
We might not spend as much time cooking as we do sleeping, but it’s another activity we spend a huge portion of our life doing.
Since we use kitchenware so frequently, the cheapest items wear down ridiculously fast. I’m sure we’ve all bought a cheap pan and found we scratched away the surface in a matter of months, making it a nightmare to wash up.
Yet there are also those relatives with a dish in perfect condition they inherited from their grandmother. It doesn’t take a genius to figure out that high-quality, expensive kitchenware lasts far longer.
At first it hurts to part with the money to buy a premium item, knowing you could find something for a fraction of the price at Walmart. But it’s worth it when you remember that item could last long enough for you to pass it on to your children!
Admittedly, if you’re living in a house share where spoons mysteriously disappear or your housemate uses a fork as a spatula, hold off on investing in kitchenware. But once you’re living in a safe environment and have the money, it’s an easy decision.
Spending money on clothes isn’t always a good idea – but it can be a brilliant idea.
The trick here is avoiding items that aren’t versatile or timeless enough. If you try to “mix up” your wardrobe with different styles and colors, you’ll end up with lots of items you’ll get sick of, never wear, or struggle to match with each other.
Instead, choose a few simple yet stylish items that look good with most clothes and won’t go out of fashion. Think a plain shirt, a trusted pair of boots, or a winter coat. It’s also a good idea to choose neutral colors that go well together – a red pair of boots and a bright yellow coat is hardly a versatile combination.
I’m not saying that you have to spend your life wearing nothing but white, black and gray. That might be the classic minimalist getup, but if you love yellow and want to make it your base color, go for it. Just don’t choose colors and styles you’re not confident you’ll want to wear in most scenarios for the foreseeable future.
Choose wisely and you’ll be effortlessly well-dressed for the rest of your twenties!
Travel is the odd one out on this list. Why? There’s no way travel will directly save you or make you any money, unless you happen to be a travel influencer.
But that doesn’t mean you shouldn’t spend money on it.
Life is about more than money! I enjoy traveling, so I’m going to make it a priority instead of locking all my money away. What kind of life would that be?
I could talk for hours about how travel is an investment in personal growth, but this isn’t about justifying travel to myself. It’s about realizing it’s okay to spend money on doing the things you love to do.
Travel isn’t for everyone. If you’re a homebody with a passion for photography, then by all means, invest in that instead. Maybe you’re passionate about clothes, and you do want to buy wacky, on-trend pieces.
But what I will say is that it’s important to budget for your hobby. No matter how much you love cars or travel, you shouldn’t be pouring 100% of your disposable income into them. Work out how much money you can realistically afford to set aside and stick to your budget.
If you can’t afford a whole new wardrobe, a new mattress, and a new computer right now, that’s okay. Don’t panic and definitely don’t take out a loan.
Not everything in this list is a must-have – but if you can afford them, don’t feel bad for splurging out instead of pouring every spare penny you have into the stock market. Your quality of life should come first.
Besides, you might be surprised at how quickly these investments lead to new opportunities and allow you to earn the money you spent right back.