51 Money Mistakes To Avoid In Your Twenties

Author Name: Celine Claire.

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Table of Contents

51 Money Mistakes To Avoid In Your Twenties

Introduction

Chapter two

Introduction

As an adult in your twenties, you tend to try to figure out your life’s financial future and also learn from your past mistakes to try creating a better tomorrow. In your twenties, you feel that adulthood is still new and thrilling.

You have many things transpiring in your mind, such as buying a car, getting a house, and getting a paying job. All these desires make you feel like you are destined for riches very soon. It is such a wonderful time!

But, although it is fun to be young, your twenties can shape or destroy your financial future. You must make great use of your time to maximize your potential, or else, you risk making costly decisions that can significantly impact your life ahead.

If you are ready to build your ideal financial future properly, these are the 51 money mistakes to avoid in your twenties.

1, Failure to save for retirement: When you are in your twenties, retirement sometimes feels very far away, making you overlook it. However, failure to save for retirement is among the most frequent and significant money mistakes that you can commit. The advantage of saving money in your twenties is that you still have more time. The earlier you begin saving, the more you can benefit from compound interest rates. Besides your savings, your employer may offer you some money to help facilitate your retirement objectives through a work-sponsored retirement savings plan.

An employer's contribution of only 5% of your salary amount can significantly impact the amount of money you will have upon retiring. Failure to save for retirement in your twenties will make you work for so long despite the aging factor, contribute more money for retirement later, or fail to retire.

2, The Mistake of Going into Credit Card Debt: For any twenty-year-old who earns less, unnecessary spending of lots of money on his credit card can be extremely tempting. It becomes easy for a twenty-year-old to place future financial expenses on his card to pay later. Unfortunately, many people in the twenties age bracket don't realize the extent to which debt can affect their lives. Getting yourself into a credit card debt can lead to extreme financial difficulties with time. Therefore, you should learn to respect and understand your credit to minimize the possibility of money mistakes in your twenties.

3, Making poor college choices: The price of attaining higher education today is rising, and student loan debts are significantly affecting the lives of young adults in their twenties. Before joining any college for further education, you have to consider the affordability of the tuition structures to you. Ask yourself questions like, Can I afford the tuition? Will I be able to cover all my expenses if admitted to this school? What are the job opportunities for graduates of this degree? Are there any cheaper college options available?

You may have to opt for well-paying careers and degrees that are affordable to obtain in vocational and technical schools. Always note that several employers don't mind where you got your degree from and only consider your capability to perform tasks.

4, Going into wedding debts: Having a mega wedding is a dream for many young couples. However, this dream always comes with a hefty price tag. A recent study from CNBC shows that the average wedding has a cost range between $26,000 to $28,000! Basing on where you live, the cost may even increase up to $70,000 or more! All these are huge sums for you to spend on only one event.

Instead of amassing debt on your major day, opt for a small budget wedding. Utilize the money that you would have spent on a cozy reception on buying yourself a house. After all, the wedding is mainly about uniting a couple in marriage, and the entertainment, guests, and food are mere supplements to it that you can go without.

5, Heavily spending on a car: When you begin earning money in your twenties, it is easy to fall into the trap of wanting to buy a car. But, spending lots of money on acquiring and maintaining a car can be a significant financial blunder that will impact on your savings with time. Why buy an expensive ride that will depreciate over time with your little savings? Don’t even think of getting a loan to finance the car you want. Only spend money on a car that is within your financial means to avoid negative consequences.

6, The mistake of buying a house you can’t afford: Acquiring a house can be a significant investment for a person in his or her twenties. It is right to start building equity in an investment like a house that has traditionally appreciated at a perfect rate. However, you must budget well for this housing investment. Always remember that it needs lots of effort and years of saving for you to afford your desirable house. Before owning a house, you have to consider paying utility bills, taxes, insurance, and repairs and maintenance.

Consider buying a more affordable "starter house" before thinking of owning a bigger one similar to what celebrities reside in and operate within your means.

7, Failure to live according to your wage capabilities: Life in your twenties can be adventures and superb. However, the temptation to spend more during this time can be overwhelming due to peer pressure and media influence. You may want the jewelry, expensive and latest gadgets, cool apartments, and partying with friends. Failure to live according to your wage means it can be a huge mistake in your money matters as it may lead to bankruptcy or brokenness.

Part of becoming a responsible adult involves limiting yourself to some wants to create a more financially stable future.

8, Inability to budget for your money: Many people in their twenties survive only by paycheck and spend all their money away not because they can't earn enough but, they simply don't know how to manage the salary they get from their jobs. Budgeting for your earnings can be a considerable measure you can use to control your money. Your budget should not be so restrictive as you can spend some of the money on acquiring basic needs and limit the unnecessary wants.

All you need is a budget for all your earnings in your twenties. Budgeting for your earnings at an early age can enable you to save for unforeseen circumstances.

9, Failure to make financial preparations: The common challenge that many twenty-year-olds face is the failure to make future predictions since they only care about what is happening today. Failure to prepare yourself for future financial emergencies is like setting yourself up for failure. Start an emergency fund today to help you navigate the hard times.

You don't have to wait to become a millionaire to start saving for financial emergencies, as you can begin with your small savings that will also accumulate over time. Do this to avoid so much stress associated with having no money when uncertainty strikes you.

10, Failure to set financial objectives: 10, Failure to set financial objectives: Building a foundation of wealth and financial stability does not happen overnight. It is a process that requires your effort and time. If you fail to set your smart financial objectives in your twenties, you will