5 things I wish I'd done at age 20 to avoid racking up $15,000 in debt

• At age 20, I already had $15,000 in debt - mostly student loans, but unnecessary credit card debt, too.
• I didn't know much about managing my money and made bad moves, like paying only the minimum balance due on my credit cards and letting the interest compound.
• If I could give my 20-year-old self advice, I'd tell her to make a budget, get smart about credit, and invest early.
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As a 20 year old, I wasn't well-versed in personal finance. In fact, my 20-year-old self was in over $15,000 of debt and had no idea how to manage money. Most of that debt was student loans, which I took out even though my financial aid covered all of my tuition and books.

As I look back, I can definitely attest to the notion that hindsight is 20/20.

Despite being in a much healthier financial state now, I can't help but think of how much further along I could be if I'd just made the right choices when I was 20.

Here are the five things I wish I could tell my 20-year-old self about money and credit cards.

1. Credit card limits are NOT free money

When I got my first credit card, I was super excited. I remember calling my mom and telling her the good news. It was like I'd won the lottery.

Except it wasn't.

The "free" money I thought I'd received was money I had to pay back - with interest. The minimum payments I made would inevitably trap me in a debt cycle for years.

I didn't have the wisdom to know how to use a credit card properly. I spent money I didn't have. I charged purchases I couldn't afford. I didn't know any better, so I learned the hard way.

I'd advise my younger self to learn how to use credit correctly (there is a right way). Then, only charge items you can afford in cash and pay off the balance in full every. single. month.

2. Avoid paying interest

Along the lines of understanding how to navigate credit cards, I had no idea about interest and how much it could actually cost me.

I wasn't aware of the minimum-payment trap, where paying the minimum due just helps maintain your balance but does little to actually pay off your principal. Or that compound interest (which is interest on your balance plus any accumulated interest) on credit cards could dig me deeper into debt.

I mindlessly spent money on credit and only paid the minimum that was asked of me. A couple of years later, those balances were essentially the same, while my bills and other responsibilities started to pile up.

So my advice is to stay one step ahead by paying off your balance in full. If you're behind and have a high interest rate, consider transferring your balance to a promotional card with a 0% APR for a set amount of time.

Lastly, stop making purchases until your balances are zero.

As the wise Albert Einstein said, "Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn't, pays it."

Be the one who understands it and you'll reap the benefits.

3. You don't have to go into debt to build credit

As a 20-year-old, I had the notion that if you wanted to build credit, you had to first build debt, and you needed to make monthly payments (but not pay off your balance) to build your credit history.

Both statements are false.

Essentially, to build credit, you need to show creditors that you're capable of making on-time payments. Your credit history collects this information over time. So you absolutely do not need to make minimum monthly payments and stay in debt to build your credit. You can pay your balance in full and still have excellent credit and payment history.

4. A budget is your best friend

A budget was not even part of my vocabulary in my 20s. My mom never talked about a budget and I didn't even know how a budget worked.

All I thought was the more money I made, the more I could spend.

What I didn't know at the time was that a budget was an important tool to help me control my money.

Once I started sticking to a budget, I was able to pay off my debt and start saving money for the things that mattered to me. I used the zero-based budget, making sure every dollar I earned had a particular "job." Using a zero-based budget helped me put more towards my debt - money I would have otherwise wasted on non-essential spending.

Now, I preach about having a budget to anyone who will listen, because it really is that important.

To my 20-year-old self: MAKE A BUDGET ... NOW!

Your 30-year-old self will thank you profusely.

5. Invest early while you still have time

The great thing about being in your 20s is that you have a gift that only comes around once: time.

If you use your time wisely by investing early, the potential compound interest can make your money grow exponentially.

As an added bonus, you get to invest less in your 20s and make more money than if you wait to invest in your 30s. The extra 10 years of compound interest will work in your favor and grow your money while you sleep.

Learning as much as you can and using these tips can help you side-step the common pitfalls most young people face. Establishing a healthy financial path in your early 20s can set you up to reap massive financial rewards down the road. So use your time wisely.

• Read more:
• 6 money apps and strategies to help you make a budget - and keep it
• Here's how much money you should save at every age so you aren't working forever
• I spent my 20s being too intimidated to invest until a casual conversation over dinner changed my mind
• I saved over $285,000 in my 20s without ever making a budget thanks to a laughably easy strategy I use instead

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