Your 20s are often an enjoyable time in your life. They will likely be filled with milestones and a number of life exchanging experiences. This is also true in regards to your finances. You will make decisions that will impact the rest of your life. Here are some mistakes to avoid so that you won’t have to look back later on in life with regret.
Overspending On A Vehicle
It is very expensive to celebrate your new job opportunity by purchasing something expensive, such as a new vehicle. That could cause negative consequences down the line. New vehicles rapidly depreciate, while you will still pay thousands of dollars in high insurance premiums along with the interest. Consider purchasing a nice used car or initially relying on public transportation.
Forgetting To Plan For An Emergency
There is simply no excuse for not having an emergency fund. That should be one of the first things that you do after meeting your basic needs. Without setting aside money for an emergency fund, you may find yourself in debt.
Relying On Credit Cards
Placing a lot of weight on your credit cards is very dangerous for your financial future. Eventually, you will have to pay for your purchases. The worst case scenario would be you spending all of your savings towards the credit card purchases. If you start missing payments, you may cause severe damage to your credit score.
Trying To Keep Up With The Newest Trends
Peer pressure can influence a number of your poor financial decisions. You’ll likely have always meet someone who has more than you, but that should not impact your lifestyle. Avoid what everyone else is doing and focus on your own finances.
Not Paying Yourself
It is a mistake to not pay yourself first when you get paid. Set aside a certain amount of money before you pay your bills so that you can establish the habit of budgeting. By putting an emphasis on saving money, you can start building wealth.
Your college education is an investment towards your future to help you live the life that you want. Take time to research your career and your potential earnings. If you won’t be making a lot of money, you may have a harder time paying back your student loan debt.
No Financial Goals
Set goals that you plan to accomplish in the next 5 to 10 years. By identifying and setting financial goals, you will establish a sense of clarity that allows you to focus on what you are trying to accomplish.
Weddings can be expensive, especially if you don’t manage the costs. You don’t have to go into debt to have a fun memorable wedding.
Trusting Others With Your Finances
Sometimes people are going to tell you things that are not in your best interest. Do your own research and always rely on your own instincts.
Not Saving For Retirement
Start contributing to your retirement as soon as possible. Do not fall into the trap of thinking that retirement is far away. Start saving money as soon as you get your first job.