8 Money Mistakes to Steer Clear of in Your 20s
When you’re in your 20s, you look like an adult, sound 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 a part of that confusion.
They don’t really teach us how to deal with finances in school, which I believe is a huge mistake. I’ve never needed half of the things I was taught, but I had to call up my mother repeatedly to ask her what to do with my taxes and which credit card to choose.
Now that I’m keen on financial literacy, I’d love to give you the tips I would have given myself in my 20s — now it’s up to you to use them.
A credit card can be a helpful tool as long as you know how to use it and do it reasonably. It can help you build a decent credit score (a synonym of being a successful adult nowadays), and you can use it when you’re short of cash before payday. Yet, if you stop controlling your cards for a moment, you might be snowed under with a lot of debt.
If that happens and you need some money, you might want to consider applying for a loan with the help of services like GetCash.com to pay off your credit card debts.
GetCash connects you with vetted lenders by filling out a secure loan application and getting it approved as soon as possible. What’s more, even if your credit history isn’t that great, there will be lenders willing to consider providing a loan.
Shopping can be exhausting. No wonder then that snatching the first available offer might seem like a good idea. However, it’s not. It might come as a surprise just how much the prices differ from one retailer to another. In other words, if you’re planning to buy something more expensive than a $15 T-shirt, better shop around before you close the deal.
It might sound like obvious advice, but it never hurts to remember that your new car will lose 10% of its cost the moment you drive off the lot and 20% more in the first year. A car is not an investment, and you gain nothing from buying a brand new vehicle, except for the attitude.
I’m not saying that it’s 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 of getting rich and famous. However, it’s quite the opposite. Chasing the labels, making impulse purchases, and living for the sake of showing off will quickly lead you to bankruptcy if you don’t concentrate on your business, job, or studies.
There is hardly a single financial article that doesn’t emphasize the importance of budget planning, but somehow most people tend to avoid it by all means possible. Try to think of it as personal therapy.
Get into the habit of writing out all your income and expenses, and you’re bound to learn a lot about yourself, like the fact that you spend $200 a month on matcha lattes or $100 on online subscriptions that you don’t even use.
Planning and analyzing your budget is the key to financial success, no matter how much money you earn at the moment. Besides, with all the budget planning apps you can find today, the process is a piece of cake.
If you’re in your 20s and you’re reading an article full of financial tips, chances are high you have a student loan. It’s also possible that you sometimes allow yourself to miss a payment or make it at the last minute. The thing 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 yourself a house, it’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 is due.
It might feel like you don’t need good insurance when you’re young. Well, you might have a lower risk of cardiovascular diseases, but it 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 get acquainted with the offers, pick the one that fits your budget and personal preferences, and make sure not to miss your payments. It’s better to be safe than sorry, 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 one to avoid at the same time.
Start putting aside as soon as you start getting a regular paycheck. You might aim for just $200 or $500 at first, with the long-term goal to place at the very least three months of living expenses in your emergency fund.