10 Money Mistakes People Make in Their 20s

 

Looking at the ten money mistakes you’re most likely to make in your twenties can help you pinpoint where you’re going wrong and what you can do about that. It will help you set up good habits that will give you a healthy relationship with money beyond your twenties! So, here are the ten way you could be going wrong money wise:

1. Forgetting to invest in themselves

With all the outgoings of adult life, it can be difficult for twenty-somethings to remember to invest in themselves. Take a course or event that will set you up for success later on, like The Ultimate Blog Plan, a workbook filled with activities and strategies to help you become successful online. There’s even a whole chapter on making money online, and as we know, all those extra income streams help! Buy the book here.

2. Not preparing an emergency fund

Also known as an escape fund, an emergency fund is there for you when you need it most. Stash a consistent amount of your wages into an emergency fund for a rainy day and should everything take a turn for the worst, your finances will still be on your side. But don’t do what I do and dip it into it!

3. Not setting financial goals

Goal setting allows us to measure our progress and stay focused. Yet many people in their twenties don’t set financial goals. These goals can be anything from the big “I will save X to fund my traveling by next June” statements to “I will save X a week by skipping the take-out coffee”. Get focused and set a goal now!

4. Credit card crazy

Credit Cards are not a magical fund for frivolous things. Don’t become too reliant on them as they WILL come back to haunt you. If you haven’t got the money to buy that top now, then don’t buy it.

5. Being a credit card conservative

That being said, if you can guarantee you will pay off your credit cards quickly and efficiently, using them can help you build financial credit you can levy later on. Don’t be afraid of credit if it helps you reach the next goal, just be absolutely positive you know how you’re going to pay it back.

6. Splashing out as a status symbol

Flashy things, expensive lunches and the latest model shouldn’t define your success. You are enough without them. Spend your money on your happiness, not on upholding an image to others.

7. Pension Planning too early

Are you freaking out that middle age is practically around the corner? Well, you shouldn’t! However, as you start to pull a decent wage and grow into a successful Career Girl it is time to think about a pension. You’ll be thankful when you retire!

8. Friends with finances

Think very carefully about borrowing large sums from friends or family, even if they offer or insist. Money can make relationships go toxic and many people enter their thirties without friends because of it.

9. Going without insurance

One of the scariest parts of being twenty-something is realizing you’re not invincible, even if you feel it! Whether it’s home insurance for your possessions or life insurance for peace of mind. Consider your options and make sure you’re covered for the worst-case scenario. Just think, what will you do if something were to happen to your laptop? Coffee disasters can cause more stress than deadlines.

10. Forgetting to have fun

It is easy to get caught up in future worries and plans – don’t forget you are allowed to enjoy your wealth today too! It’s not all about saving and crying! After all:

‘Real generosity towards the future lies in giving all to the present’
Albert Camus


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Looking at the ten money mistakes you’re most likely to make in your twenties can help you pinpoint where you’re going wrong and what you can do about that. It will help you set up good habits that will give you a healthy relationship with money beyond your twenties! So, here are the ten way you could be going wrong money wise:

1. Forgetting to invest in themselves

With all the outgoings of adult life, it can be difficult for twenty-somethings to remember to invest in themselves. Take a course or event that will set you up for success later on, like The Ultimate Blog Plan, a workbook filled with activities and strategies to help you become successful online. There’s even a whole chapter on making money online, and as we know, all those extra income streams help! Buy the book here.

2. Not preparing an emergency fund

Also known as an escape fund, an emergency fund is there for you when you need it most. Stash a consistent amount of your wages into an emergency fund for a rainy day and should everything take a turn for the worst, your finances will still be on your side. But don’t do what I do and dip it into it!

3. Not setting financial goals

Goal setting allows us to measure our progress and stay focused. Yet many people in their twenties don’t set financial goals. These goals can be anything from the big “I will save X to fund my traveling by next June” statements to “I will save X a week by skipping the take-out coffee”. Get focused and set a goal now!

4. Credit card crazy

Credit Cards are not a magical fund for frivolous things. Don’t become too reliant on them as they WILL come back to haunt you. If you haven’t got the money to buy that top now, then don’t buy it.

5. Being a credit card conservative

That being said, if you can guarantee you will pay off your credit cards quickly and efficiently, using them can help you build financial credit you can levy later on. Don’t be afraid of credit if it helps you reach the next goal, just be absolutely positive you know how you’re going to pay it back.

6. Splashing out as a status symbol

Flashy things, expensive lunches and the latest model shouldn’t define your success. You are enough without them. Spend your money on your happiness, not on upholding an image to others.

7. Pension Planning too early

Are you freaking out that middle age is practically around the corner? Well, you shouldn’t! However, as you start to pull a decent wage and grow into a successful Career Girl it is time to think about a pension. You’ll be thankful when you retire!

8. Friends with finances

Think very carefully about borrowing large sums from friends or family, even if they offer or insist. Money can make relationships go toxic and many people enter their thirties without friends because of it.

9. Going without insurance

One of the scariest parts of being twenty-something is realizing you’re not invincible, even if you feel it! Whether it’s home insurance for your possessions or life insurance for peace of mind. Consider your options and make sure you’re covered for the worst-case scenario. Just think, what will you do if something were to happen to your laptop? Coffee disasters can cause more stress than deadlines.

10. Forgetting to have fun

It is easy to get caught up in future worries and plans – don’t forget you are allowed to enjoy your wealth today too! It’s not all about saving and crying! After all:

‘Real generosity towards the future lies in giving all to the present’
Albert Camus


Sign up for our newsletter and stay up to date

  • Thank you for this post! Being in my late 20’s I have started to realise that I need to start looking into my finances and start to plan for the future and not just now. This post is really giving me some great advise.

    https://acupofthegoodlife.wordpress.com/

  • Building credit is so important, yet I feel like it’s the easiest thing that 20-somethings don’t do in fear of running up a super high credit card bill. I’m now realizing how I need to actually use my card if I want to buy a house or car anytime in the future! Great list!

    https://namastaytraveling.com

  • Shevoneese Mcfarlane

    Thanks for this post! Lately I have been thinking I need to be wiser with my finances and your list really put things into perspective. 6/10 I’ve already done but there is a need for improvement. I’ll definitely will be using your post as a guide.

    http://www.sheviimc.com

  • I agree with everything here! People are spending too much money on stuff that’s not needed (bags, shoes too many cappuccinos and such) and not where it matters (health insurance, more education)

    http://thedianaedition.com

  • I love reading CGD financial posts! My goal is to secure my savings account enough for 2 months of bills + an emergency 700 dollars for whatever may come my way! Thanks for the extra dose of motivation!
    XX -KK
    http://www.KayleeKarcher.com
    #ObsessedWithEverything

  • Sea + Terra

    Yay i love financial posts! I’m really proud of myself because this is the year that i made solid goals and set away savings among other financial steps!

    http://www.seaandterra.com

  • Re. #6 and #10: When I was in my 20s and got my first grown-up job, I spent A LOT of money shopping and buying useless stuff at H&M and so on, clothes I can’t even remember now. But I don’t regret the money I spent on travel or the two Chanel purses I bought (after agonizing over each of them for months and saving up the money), which are two of my most cherished purchases ever. Figure out what will make you happy in the long run and spend your money there, but you should enjoy what you’ve earned and live your life because as you get older and the responsibilities start to stack up (paying for a wedding, a mortgage, a child, saving for retirement or your child’s education fund), the opportunity cost of spending money on something that’s 100% fun and for yourself increases.

  • Kira Kwan

    This is a well-intentioned post, but the advertisements for the Chloe bag and YSL lipstick aren’t really in line with the message of saving money!

  • Megan Wesley

    Fab tips – thanks for the advice x

    http://www.meganwesley.com

  • Priscillia Okpan

    These tips are true and so relevant.
    xx
    Priscillia
    http://www.kimdave.com

  • Natalie Redman

    Definitely guilty of some of these!

    http://www.upyourvlog.com