7 money mistakes to stop making in your 20s
Managing money is tricky, especially when you just graduated, starting a job—basically, when you’re in your 20s. Starting your adult life: juggling family, keeping up with friends, and stress at work, immersing yourself in self-discovery; all the while suffering on student loan debt and an entry-level wage, isn’t initially how you imagined your life to be after university.
As you go along and learn the financial slips and slopes, you’ll definitely fall prey in committing several money management hiccups—and it’s okay, that’s normal for people just starting out in their 20s. What’s troubling is letting these mishaps continue on for years.
Photo by Fabian Irsara
The time has come for you to do some fixing in your wallet and budgeting system. These money mistakes can no longer go on until your 30s. Time to get serious with your savings and spendings as early as now. Take a look at these common financial management mistakes you should stop making.
You update frequently
Whether it be in terms of gadget and tech or your wardrobe, getting up to date with the latest trends will only leave a dent in your wallet.
People line up for the new iPhone Apple releases year after year. Android users are not any better. Chances are, there are only minor upgrades that will cost you an arm and a leg. You’re basically purchasing a smartphone beyond your budget—or one that you don’t really need since you own the predecessor unit.
You got by without the new features and you’ll do just as fine without buying the new release. The same goes for new sneakers, trendy clothes and makeup products, and a lot more. Don’t get eat up by the trends. Live within your means.
You keep up with the Joneses
Owning huge homes and at least three luxury cars to keep up with your neighbors or friends requires a whole chunk of money you could’ve put to better use such as pay off your debt and loans, fill up your retirement and savings fund or for your children’s college fund.
This dilemma is common among those who are in their 30s. Keeping up with other people’s lifestyle, especially if it’s beyond your means, is a cancer to your money bank particularly if you follow a limited budget. If you’re reason for this it to be accepted in your social groups, or for whatever other reason it may be, you’ll only get buried in a debt cycle. For what it’s worth, learn to spend within your means.
You pay for cable channels
Cable channels for lesser price? Great deal! But do you even watch every channel you paid extra for even if it’s a good deal? If not, then you’re just wasting your money paying for the additional channels (and your cable entirely if you no longer flick the switch of your TV.)
Yes, they offer good deals but if you’re not really that much of a TV person, then the deals aren’t for you and you should skip paying extra for an extra cable network. If you spend more time browsing Netflix and pay for its services, you might as well cut the cable anyway and save much more.
You use your credit card religiously
This isn’t to say you should avoid using your credit card/s at all cost. Applying for a credit cards as early as in your 20s is a smart way to kick off your credit history. It’s also convenient at times where you need access to credit whenever an emergency occurs.
The downside is, most 20-somethings and credit card holders in general fail to use their credit cards responsibly which then results in getting yourself caught in a debt trap. Most people use their credit cards to purchase their “wants” and treat the plastic card as “unlimited money pass.” You see where this notion goes on end.
Time will come when you should slow down on whipping your card and swiping it to make a purchase. Instead, gradually train yourself to only use cash in your day-to-day expenses and only use your credit whenever you actually need it. And make sure you can pay off the balance every month—never miss a payment due. This will prevent you from getting in debt and teach you to become more responsibly in handling money.
You buy unnecessary things
Can’t decide whether to go for the latest iPhone flagship or a Samsung S7 or Note 7? You know what? You definitely have to go with: neither.
Whenever you’re out shopping at the grocery or mall stores, before deciding to purchase anything, ask yourself whether it’s something you need or just something you want. Because these are two different things that greatly impacts your budget.
Just because everyone’s getting their hands on the latest smartphone, camera and other gadgets; clothing and shoes, doesn’t mean you should go on the same boat. The simplest strategy to prevent impulse purchases is to ask yourself before you leave with a new bag at hand whether you need it or just want it. It’s a life-changer.
Pay your credit cards or loans on time
How many times have you completely forgotten about settling your credit bills and loans? A lot of people still prefer the old way, manually paying off their credit cards or loans rather than set up an automatic payment method.
With manual payments, chances are you’ll forget the bill’s due which then may result to a late payment fees—additional costs. With automatic payments set up, you’ll never give away free money or additional fees to banks or your other lender services because of late fees.
You don’t save
You’re young and having the time of your life, that’s okay; so long as you have enough to spare for a rainy day.
Many young adults tend to overspend on entertainment and luxury expenses. It could vary from one’s lifestyle but if you’ve gone from a lavish one down to being a young-adult-on-their-own, you might want to slow down on spending frivolously.
Assuming you’re in your 20s or close to hitting the 30s, chances are you might still be living with your parents or split the rent with a roommate(s). If that so and as a general rule of thumb, you should be able to save at least a 6-months’ (the longer, the better) worth of cash for emergency or your savings.
What money mistakes have you overcome and how? Share it with us!
About Chie Suarez
Chie Suarez has spent time figuring out ways on saving money and stepping away from her go-to retail stores. She then became a writer for Speedy Money which offers hassle-free payday loans services.