The 4 Biggest Money Mistakes To Avoid In Your Twenties : Your twenties can be amazing, but they can also be ridiculously expensive and they’re the time where you’re an adult in so many ways, but you certainly aren’t in others. This can lead to mistakes, and while everyone makes bad decisions sometimes.
If big enough, your money mistakes can have major consequences that will haunt your well into the next few decades of your life. Living large seems like a perfectly logical idea now that you’re free of your parents’ home and out in the big wide world by yourself. Here are four mistakes that should definitely be avoided:
Digging A Grave Of Debt
This early in your adult life, you’re probably going to be forced to live beyond your means at times, but that doesn’t mean you should let it become a habit. Credit cards are not your friend. Assess your finances, lower your debts as quickly as possible, and when things do go wrong, look into payday loan alternatives so you don’t get ripped off by ridiculously high interest rates and unfair repayment terms.
Not Putting Any Money Aside
We know it’s hard to save when you’re still trying to establish yourself but it’s important to do your best to build up some spare funds for emergencies. If you can, put away ten percent of your paycheck each cycle and aim to have at least six months living expenses in the bank to cover you for a rainy day. This may seem unrealistic but not having enough (if any) money put aside is one of the biggest problems those in their twenties run into if an unexpected issue or expense pops up.
Not Being Insured
Insurance feels like a waste of money until you have to make a claim. Your belongings, especially big-ticket items like cars, need to be insured even if you’re 100% sure you could replace them in something goes wrong. There are far too many variables in life to be counting on your bank balance to look after unexpected problems so find coverage that suits you, at a price point you can work into your budget and take out a policy. You’ll thank us when and if you need it.
Not Planning for the Future
Your life may be centered around having a good time at the moment but you’re not always going to be able to live happily on a paycheck-to-paycheck basis. Being an adult means having responsibilities and even if your financial ones are fairly standard now, they may not be in the future. Decide on your goals and create a logical plan for how you’re going to achieve them, making sure that you work out what financial milestones you’ll need to get there: a raise, a tighter budget, etc. Incorporate your overarching goals into the creation of your smaller ones and try to do at least one thing a week that will help you get there.
Your twenties are a lot of fun but they’re also one of the hardest decades you’ll experience in life. Transitioning from your teenage years into adult life is hard and digging yourself a financial hole will make things even harder. Avoid the four major mistakes in this article and do your best to sidestep the minor issues that may pop up. Being financially responsible and aiming for stability over pleasure doesn’t seem like much fun now but you’ll thank yourself later.
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