Learn

Personal Resource Center
Back

Saving Money: Wealth Killers for the Young


Building wealth when you’re young comes down to avoiding everyday habits that add up to big consequences later on. Many choices that feel “normal” in your 20s and early 30s limit your ability to save and invest over time.

What makes these “wealth killers” especially damaging is the opportunity costs of what those dollars could have become.

Below, we break down some common wealth killers and show how directing those savings into a tax-deferred account earning 8% annually could compound into meaningful wealth. (An 8% long-term annual return is commonly used as a conservative planning assumption, since it’s slightly below the S&P 500 average return.)1


Buying a New Car Instead of a Used One

Buying a car is the first major financial decision many young adults make on their own. New cars are often marketed as safer, more reliable and worth the higher price. But there’s a huge upfront cost difference.

According to Edmunds, the average price of a new vehicle is $47,542, compared to $27,177 for a used car.2 That’s a gap of $20,365 before considering taxes, interest, insurance, or maintenance.

That extra cost means a higher monthly payment and limits how much cash you have available for saving and investing during a critical period for long-term wealth building.

If you invested that $20,365 difference, it would grow to roughly $43,967 in 10 years.


Sports Betting and Gambling

Sports betting has exploded in popularity among young adults, especially young men.3

According to a study by Northwestern University’s Kellogg School of Management, bettors spend an average of $1,100 per year in online bets.4 Even worse, increased sports gambling leads to higher entertainment spending, more credit card debt and less money going toward investment accounts.

If you were to invest that $1,100 per year, it would be worth $15,935 after 10 years.


Lottery Tickets and Scratch-offs

Lottery games are often called a tax on people who can’t do math,5 and the statistics explain why. The odds of winning a major lottery grand prize are nearly 1 in 300 million.6

Americans spend an average of $320 annually on lottery tickets.7

If you invested that $320 per year, it would grow to $4,636 after 10 years.


Takeout, Delivery and Expensive Coffee Habits

Food delivery apps and daily specialty coffee feel inexpensive in isolation, but they compound quickly.

Say you get takeout or delivery twice per week, spending $25 each time. Plus, your caffeine habit runs $6 per day, five days per week. This adds up to roughly $4,165 per year.

Clock icon
Many choices that feel “normal” in your 20s and early 30s limit your ability to save and invest over time.

If you invested that amount, you would have $60,337 at the end of 10 years.


'Pay in Four' Installment Plans

Consumers increasingly use buy now, pay later (BNPL) services for discretionary purchases, including food delivery, clothing and electronics. While many plans advertise “no interest,” missed payments can trigger fees, penalties and damage to your credit.

According to a report from the Consumer Financial Protection Bureau (CFPB), the average yearly total dollar amount for BNPL loans is $848 per user.8 If you skipped online shopping, investing that amount each year would result in $12,285 at the end of 10 years.


Carrying Credit Card Debt

As of January 2026, the average credit card interest rate is nearly 20%.9 Carrying a balance month to month turns purchases into long-term financial drains.

Generation Z consumers carry an average credit card balance of $3,493. Assuming an interest rate of 20% and a minimum monthly payment of interest plus 1% of the balance, it would cost you $2,034.07 in interest and take five years to pay off the balance.

If you avoided carrying that balance and instead invested $2,034.07 over 10 years, you would have $4,391.


Over-Furnishing Your First Apartment

Furnishing your first apartment is an exciting milestone, but it can also be financially draining.

Outfitting a one-bedroom apartment with quality new furniture costs between $7,000 and $11,000.10 However, you can purchase many items used for a fraction of the price, with minimal quality trade-offs.

It might take a little longer to scour consignment shops, estate sales and online marketplaces for the right tables, shelves, dressers and other items, but it can add a unique, character-filled style to your living space.

Assume you spend $4,000 on secondhand furnishings instead of $10,000 on new ones and invest the $6,000 difference. After 10 years, you would have $12,954.


Too many streaming subscriptions

Streaming subscriptions feel minor, yet subscription creep is real. If you pay for multiple services at $15 to $20 each, you can easily spend more than $100 per month without realizing it.

Instead, consider limiting yourself to just one or two at a time. If you spent just $30 per month instead of $100 and invest that $70 difference each month, you would have $12,169 at the end of 10 years.

None of these habits alone will make or break your financial future. But combined, they represent more than $166,000 in lost savings over a decade.

To avoid these wealth killers, align your everyday decisions with your long-term priorities. The earlier you redirect these dollars, the more time compounding has to work in your favor.

Important disclosure information

Asset allocation and diversifications do not ensure against loss. This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

  1. Karen Axelton, “What Is the Average Stock Market Return?” Experian, published July 20, 2025. Accessed February 18, 2026. Back
  2. Ivan Drury, “Average Price Gap Between New and Used Vehicles Surpasses $20K for the First Time Ever in Q3,” Edmunds, published October 29, 2024. Accessed February 18, 2026. Back
  3. John Gramlich, “Americans increasingly see legal sports betting as a bad thing for society and sports,” Pew Research Center, published October 2, 2025. Accessed February 18, 2026. Back
  4. Scott R. Baker, Justin Balthrop, Mark J. Johnson, Jason D. Kotter, Kevis Pisciotta, “Online Sports Betting is Draining Household Savings,” Kellogg School of Management, published December 1, 2024. Accessed February 18, 2026. Back
  5. Alicia Hansen, “State-Run Lotteries as a Form of Taxation,” Tax Foundation, published October 8, 2005. Accessed February 18, 2026. Back
  6. Taylor Johnston, “Lottery jackpots are getting bigger and harder to win. See the data on Powerball and Mega Millions’ top prizes,” CBS News, published December 25, 2025. Accessed February 18, 2026. Back
  7. Megan Cerullo, “Lottery spending is growing. Residents shell out the most in these states,” CBS News, updated September 7, 2025. Accessed February 18, 2026. Back
  8. CFPB, “The Buy Now, Pay Later Market,” published December 2025. Accessed February 18, 2026. Back
  9. Ted Rossman, “Current credit card interest rates,” Bankrate, published January 28, 2026. Accessed February 18, 2026. Back
  10. Karen Lau, “The cost of furnishing an apartment: a step-by-step guide with breakdown of furniture costs,” Furnishr, published September 13, 2024. Accessed February 18, 2026. Back