Avoid These Financial Mistakes In Your 20’s Like They Were A Plague
Do Whatever You Have To Do To Avoid These 3 Things
Paying only minimum payments
Not having a savings
Avoiding starting a budget
PLUS a bonus mistake you should never make
Start On The Right Track Learn From Others Mistakes
Making a plan for what happens to your money is seriously one of the wisest things you could ever do for your personal finances.
We’re human it is in our nature to make mistakes at some point in our life but if we can prevent them why not? Most of our mistakes are made in our 20’s. So why not learn from the generation before us.
When we are in our 30’s we have such big dreams and big ideas, everything and anything seems possible. Basically set your mind and go for it!
A ton of us in our younger years don’t even think about the financial decision we make and the future consequences those decisions will have on our future. An if you are one of the few that did think about your future finances then you are defiantly in the minority.
Most in there 20’s are only thinking about the here and now, which means all they care about is short term cash and how you can get as much as possible.
The honest truth for me was how can I get to the end of the month while paying my bills and still buying all of the things that I wanted to buy.
To me when a month like that happened it was a success. I had a very bad habit of not think about my financial future. I was living paycheck to paycheck and was not putting away any money into savings.
Having a budget was so far from what I was thinking about because I only figured people who were broke needed them.
I could not have been more wrong! Budgeting is for EVERYONE. It is never too early or too late to start learning good money habits and developing a budget.
Let’s take a deeper look at the 3 financial mistakes you must avoid in your 20’s.
1 | Paying Only The Minimum Payments On Your Credit Card
You are not alone, I have been completely guilty of this one too.
But it is crucial that if you are going to have a credit card that you know how to properly use it responsibly.
Way back when I couldn’t even remember the purchases that I made on my credit card. But I do remember having to pay off the credit card debt.
To the average person in their 20’s, they think of credit cards as “free money” and I know the feeling I can see why they think that.
Often times credit cards are displayed in a way that seems like they would be the answer to all of your financial problems but really they are not, they could actually do the opposite for you.
Simple a credit card only gives you a short term financial buffer. But after a small time frame, you will have to pay it all back anyway, otherwise, your debt will just keep piling up and snowballing.
Snowballing debt is a very very dangerous thing and you will have to tackle it head-on. So steer clear from snowballing debt.
When you only are paying the minimum amount on a credit card it essentially means that it is the least amount that you can pay without incurring any charges or penalties from your lender.
The very problem with only paying the minimum on a credit card is that you will have to pay back additional large interest charges on top of the amount you already owe.
I get it sometimes we can’t devote large sums of money to our credit cards, but even if you are paying a bit more than the minimum payment you will be in better shape than if you didn’t. You could end up saving yourself hundreds or even thousands in the long run.
So here is a fun fact, believe it or not during your 20’s is the time when you are most likely to have some sort of disposable income.
Disposable income means that you have money coming in without having a bunch of expenses for your money to go to.
For this simple reason older people oftentimes like to give people in their 20’s financial advice to stop them from making the same financial mistakes that they made in their younger years.
If you decide to make a commitment to saving money in your 20’s not only will it engrain good financial habits for the rest of your life but it will give you good savings. You will thank yourself in your 30’s and 40’s.
It is so important to save for so many reasons. So please don’t put off your savings.
This app really makes your savings as simple as possible by saving a little bit for you each day.
All you gotta do is link your bank account to the app and forget about it. Go about your spending as usual and pay your bills like you normally do.
What Digit does is it analyzes your spending to find the extra money you could save.
For instance when the app finds money that could be saved it automatically transfers it to a linked savings account. You will also receive a 1% bonus for every 3 months you save.
The best part is it is completely free to try for the first 30 days, so give it a shot and see what you think. After the 30 days are up it is $2.99/month. But it is totally worth it if you need an extra hand saving.
3 | Not Having A Budget
Yes, the good old budget. So many millennials these days do not know the power that an effective budget can have on your personal finances.
I talk about budgeting a lot and there is a good reason for it, budgeting can seriously reverse the damage you’ve done to your finances.
Without a budget, there wouldn’t be a way for you to see and know where your money is going or how you are spending your money.
Having a budget is seriously the most important thing that I and my husband did to change the direction of our financial future. I only wish that we would have started budgeting sooner in our lives, it would have saved us a pile of debt.
Remember budgets are for everyone out there, not just the people that are broke.
The more that you use your budget the more you will realize just how much a budget can actually help your personal finances. It will slowly stop being a challenge for you to see your money come in and already have a plan for it. Impulse spending will soon be a thing of the past for you.
If want to ensure that you will stay out of debt then your best friend should be your budget.
If you don’t already have a budget in place, you should always remember it is never too late to start. You can grab my FREE budgeting worksheets by filling out the form below.
Bonus 4 | Spending To Much On Clothing
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