8 money mistakes to avoid in your twenties
When you’re in your 20s, you look like an adult, talk like an adult, and people think of you as an adult. But, at the same time, you’re still trying to figure out how life works. And money is often part of this confusion.
They don’t really teach us how to manage finances in school, which I think is a huge mistake. I never needed half of the things I was taught, but I had to call my mom several times to ask her what to do with my taxes and which credit card to get.
Now that I’m passionate about financial literacy, I’d like to give you the advice I would have given myself in my twenties – now it’s up to you to use it.
A credit card can be a useful tool as long as you know how to use it and do it sensibly. It can help you build a decent credit score (synonymous with being a successful adult these days), and you can use it when you run out of money before payday. Still, if you stop controlling your cards for a while, you could be overwhelmed with a lot of debt.
If this happens and you need money, you might want to consider applying for a loan using services like GetCash.com to pay off your credit card debt.
GetCash connects you with approved lenders by completing a secured loan application and getting it approved as soon as possible. Also, even if your credit history is not so good, there will be lenders willing to consider giving you a loan.
Shopping can be exhausting. No wonder then that grabbing the first available offer might seem like a good idea. However, this is not the case. It may be surprising how much prices differ between retailers. In other words, if you’re thinking of buying something more expensive than a $15 t-shirt, better shop around before you close the deal.
It might seem like obvious advice, but it never hurts to remember that your new car will lose 10% of its cost the moment you leave the lot and another 20% in the first year. A car is not an investment and you gain nothing from buying a new vehicle except attitude.
I am not saying that it is only reasonable to buy a car on its last legs, but even the vehicle that is only one or two years old is a much better decision from the financial point of view.
In the world of Instagram, it’s hard to stay away from the idea that looking rich and famous is the only way to get rich and famous. However, it is quite the opposite. Chasing labels, impulse buying, and living to show off will quickly bankrupt you if you don’t focus on your business, job, or education.
There’s hardly a single financial article that doesn’t stress the importance of budget planning, but somehow most people tend to avoid it by all possible means. Try to think of it as personal therapy.
Make a habit of writing down all your income and expenses, and you’ll learn a lot about yourself, like the fact that you’re spending $200 a month on matcha lattes or $100 on online subscriptions you don’t even use. .
Planning and analyzing your budget is the key to financial success, no matter how much money you are making right now. Plus, with all the budget planning apps you can find today, the process is a breeze.
If you’re in your 20s and reading an article full of financial advice, chances are you have a student loan. It is also possible that you sometimes allow yourself to miss a payment or make it at the last minute. The fact is, getting organized is the best thing you can do for your credit score.
Late payments will hurt your score, which will lead to worse loan terms in the future, and if you’re ever going to get a house, that’s not something you want. So face your fears, open your student loan documents, and make sure you know how much money you owe, what your monthly payment is, and when it’s due.
You might feel like you don’t need good insurance when you’re young. Well, you might have a lower risk of cardiovascular disease, but that doesn’t mean you’re invincible. And you definitely don’t want to see a six-figure bill for emergency surgery or property damage.
So familiarize yourself with the offers, pick the one that fits your budget and personal preferences, and make sure you don’t miss your payments. Prevention is better than cure, and insurance is one of the things that will keep you on the safe side.
I put it last only because they say what comes last is remembered the most. Not starting to save when you’re young is the biggest financial mistake and the easiest to avoid at the same time.
Start saving as soon as you start getting a regular paycheck. You might aim for just $200 or $500 at first, with the long-term goal of putting at least three months of living expenses into your emergency fund.