This is a guest article written by Darwin, the author of the blog Darwin’s Money. Darwin is a numbers guy with an MBA. If you like this article, subscribe to the Darwin’s Money RSS feed for more.

You live and you learn, right? Well, that can be expensive when you’re first setting out in the world and haven’t had much exposure to the various significant financial decisions adults face in life. I’ve had some great successes financially from buying a home right out of college during the boom to making some great investments. However, I’ve made my share of mistakes, especially the first time I encountered various key financial decisions. Hopefully, young readers will catch this before they repeat the same mistakes.

1. Wrong health care plan: $3,000. It should be a pretty simple choice, right? You pick an HMO plan and as a young, healthy employee, chances are you’ll barely spend any money out of pocket no matter which plan you pick, right? Well, I had always heard that HMOs had lousy service and restricted doctor network lists, etc., so I naturally went with a 90/10 plan requiring my wife and I to be responsible for 10% of the total medical costs until we hit a rather high threshold of $1,500 per person. For a couple years the 90/10 was working out fine. Then we decided to start a family.

What I didn’t realize, and never bothered to check, was that a typical birth would run $20,000 to $30,000 and we’d be on the hook for a portion of that. Under the HMO plan, it would have been a straight $250 total, no matter what went down. Even more frustrating, which I didn’t figure out until our second kid, was that my wife’s ob-gyn was in-network for the HMO anyway, so there should have been no concerns over lousy network coverage. Well, once our child was born, I also realized that the $1,500 cap wasn’t limited to just my wife! They billed our child and my wife, so in the end, we ended up paying between $2,500 and $3,000 total when we could have just paid $250 under the HMO plan.

Granted, bringing a child into the world for a couple thousand bucks was well worth the cost and reasonable given everything involved, but we could have done it for thousands less. I’d advise that you scour the health plan details at selection time each year, and if you’re considering a child the next year, make sure you pick the plan that suits that situation best.

2. Burned by a real estate agent: $6,000. I bought my first house a year out of school in 1999 just when the real estate market was ready to run during between 2000 and 2006. I’ve always considered that purchase to be my best investment. I turned a 3% down payment into a 100% return on the home at sale, netting me a six-figure profit and enabling us to buy a much larger, nicer home when our family grew. However, I paid $6,000 more than I had to for the home. When I put in my bid on the house, the agent said there was another bidder offering more, and I had to bid higher if I wanted the house. This was common as houses were flying off the market if you didn’t move quickly.

As my one-year lease on my rental was running out and this was the only house I actually liked in the area, I figured I had to act quickly. I raised my bid by $6,000 and I got the house. What was odd though, was the agents always seemed to go out of their way to ensure I never talked to the homeowners, like during the inspection, during the closing, the final walk-through, etc. What was revealed at the last minute was there was no other bid!

The wife, who probably didn’t know what was going on, made a statement like, “Wow, I’m so glad this worked out. If you didn’t agree to buy when you did, I don’t know what would have happened. Our other deal would have fallen apart!”

I was a bit confused and said, “Oh, didn’t you have other bids?” She didn’t answer. Perhaps she figured out what happened as well and was initially wondering why I even raised my initial bid. I was a dumb 23-year-old and didn’t know the game, but my hunch is that the other agent, perhaps with or without the help of the seller or my agent, had somehow concocted the situation to get me to raise my bid unnecessarily.

When I contacted the seller’s agent, he told me there was another bid but he couldn’t provide me the documentation since it was confidential from the bidder, etc. I just dropped it. I had a home I loved and the deal was closed. What was I going to do? In hindsight, I think this was just a function of a crazy housing market and some unscrupulous people in the industry, but after reading this, perhaps you’ll be armed with some questions and options to combat a similar situation in the future.

3. Paying for stuff I didn’t need: $1,000. There’s a pretty long list of things I spent money on in my twenties that I clearly didn’t need. Here are just a few that easily added up to over $1,000 annually. These are expenses I no longer incur now that I’m older and wiser:

• Paying for warranties on electronics (bad investment statistically)
• Being an early adopter of new gadgets like MP3s and GPS systems (expensive hobby)
• Subscriptions to magazines I can’t keep up with
• Paying for daily newspaper delivery when I only have time to read on weekends
• Shopping without using coupons — and worse, forgetting the store card and paying ridiculous prices for groceries
• Paying a full service broker to do transactions over the phone before finally signing up for E*Trade
• Paying PMI longer than I needed to before figuring out I could get my home reappraised and wipe it out

All in all, in contrast to many friends and family, I was on the right side of the continuum in terms of responsible saving, investment and frugality, but I’m man enough to admit I made several mistakes that could have been worth a tidy sum now. I didn’t put in the time and effort to holistically attack my spending and seek out opportunities for saving, especially on some of the useless items I used to buy.

What are some of your biggest regrets from your twenties? Please share in the comments below.

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