Your 20s is a time where you will do a lot of learning; with learning comes mistakes. However, you shouldn’t let the mistakes of your 20s hurt your future. To that end, you should strive to avoid common money mistakes that 20-somethings make that have a huge impact on your financial future.
Ignoring your retirement
We realize that your retirement seems like it’s a million years away, but the golden years of your life will sneak up on you if you aren’t prepared. One of the biggest problems that retirees have is managing their finances, because their retirement fund isn’t big enough to effectively sustain. Start investing in your retirement right now so that this isn’t a problem for you.
Not having a budget
Having a few extra coins doesn’t mean that you should spend it. As a 20-something, owning a house or paying for your wedding may not be on your short-term list, but you may want to eventually make expensive investments like these. By setting a budget that goes beyond paying the bills, you will be able to save enough money for your future investments and an emergency fund.
Overusing credit cards
With a big bank giving you unlimited access to anywhere from a few hundred to thousands of dollars — and “rewarding” you for every transaction — overusing your credit card is an easy money mistake to make. However, the high interest charges that these credit cards accrue will make every transaction cost several times more than it should if you aren’t careful.
Pursuing advanced degrees just because
Having a B.S., M.S. or DR. attached to your name sounds great, but how does earning these titles affect your financial well-being? Many 20-somethings pursue advanced degrees because they’re told that they should, accepting tens of thousands of dollars in student loan debt without a second thought. Instead of jumping right into the next stage of higher education, figure out whether or not you really need to make the investment. If you do, don’t sign up for the first student loan program that accepts you. There are billions of dollars in scholarship funds out there for people in all types of situations. Many of these programs get no applications, so one of the biggest money mistakes you can make is to assume that there aren’t any programs for you.
Make your entire life easier by managing your 20s a little better.