30-Year-Old with $700K Shares 4 Early 20s Spending Habits She Avoided: 'No Regrets'

Financial Sacrifices in the 20s Can Lead to Long-Term Gains

Michela Allocca, a personal finance consultant based in Chicago and author of "Own Your Money," has built a net worth exceeding $700,000 by the time she turned 30. Her journey involved making strategic financial sacrifices during her 20s, which she believes were essential for maintaining long-term stability. Allocca emphasizes that while it may feel challenging to forgo certain pleasures, these choices can have a significant impact on future financial health.

Avoiding Unnecessary Expenses in Early Career

Allocca highlights four key habits she avoided in her 20s, which helped her build a solid financial foundation:

1. Limiting Travel Expenses

The pressure to travel extensively during young adulthood can be overwhelming, especially with social media showcasing extravagant trips. However, Allocca found that frequent travel often came at a high cost, particularly when starting out in a career with a limited income. She chose to take more affordable domestic trips instead of expensive international journeys, saving money that could be redirected toward investments and savings.

By planning trips well in advance and focusing on experiences she genuinely wanted, Allocca was able to enjoy travel without compromising her financial goals. She believes that it’s perfectly acceptable for people in their 20s to delay big trips until they can afford them.

2. Delaying Living Alone

Living alone is often seen as a milestone for young adults, but Allocca made a conscious decision to live with roommates or even return home during the pandemic. This choice allowed her to save approximately $1,000 per month on rent, which she used to invest in her future.

Allocca points out that social media can create unrealistic expectations about what young professionals can afford. In cities like San Francisco or New York, renting a place on a modest salary can be extremely difficult. By waiting until she was financially ready, Allocca was able to move into a more comfortable apartment without disrupting her financial progress.

3. Adopting a Minimalist Wardrobe

In her early 20s, Allocca took a minimalist approach to her clothing, focusing on versatile pieces that could be mixed and matched. She shopped at budget-friendly stores like Primark and Old Navy, prioritizing affordability over trends. This strategy not only kept her clothing costs low but also reduced the stress of constant shopping.

Today, she continues to follow this philosophy with what she calls a "capsule wardrobe" of elevated basics—items that are both functional and stylish. While she now spends more on higher-quality items, she ensures they are durable and fit well with her existing wardrobe.

4. Avoiding Convenience Costs

Allocca avoided paying for convenience in her 20s, choosing instead to walk, cook at home, and do things herself rather than spending extra on services like Uber or food delivery. She believed that the time saved from these small conveniences wasn’t valuable enough to justify the expense.

By consistently avoiding these costs, Allocca saved around $200 per month, which contributed significantly to her ability to save and invest during her 20s. While she sacrificed some comfort, she has no regrets about these decisions.

The Benefits of Strategic Financial Choices

Allocca's approach to managing her finances in her 20s demonstrates the importance of making intentional choices. By avoiding unnecessary expenses and focusing on long-term goals, she was able to build a strong financial foundation that has paid off in the years since.

Her story serves as a reminder that while it may be tempting to keep up with others, the true value of financial discipline lies in the ability to make choices that align with one's own values and goals.