In this post, we’re going to talk about the top 5 money mistakes you should avoid in your 20s, and I will also share what you should do instead😁. So, let’s dive right in.
- Not saving enough. It’s important to start building an emergency fund as early as possible. many people in their 20s would rather spend all their income, and take loans than save for an emergency fund.
2. Overspending on unnecessary luxuries. A lot of people, especially those in their 20s try to keep up with their rich peers and end up spending beyond their capacity on designer handbags, luxury cars, etc, more than what they can afford. So Try to prioritize your expenses and avoid going into debt for non-essential items. add data
3. Not investing in your future. At the very least, you should contribute to a retirement account or start an investment portfolio. This can be done through your employer if they provide 401 K, I have a separate video explaining this so that you can check it out here.
4. Neglecting to budget. Creating a budget will help you track your expenses and ensure you’re living within your means. There are many apps you can use to budget, I personally use Mint and I made another video where I give several other options, so feel free to download one of those Apps and see how this helps you stick to a budget.
But, If you don’t like to do that through an app, you can also track your expenses using a spreadsheet. The basic idea is not to neglect to budget.
5. Relying too heavily on credit cards. While credit cards can be convenient, make sure you pay off your balance in full each month to avoid high interest charges. As of the second quarter of 2023, The U.S. credit card debt has exceeded $1 trillion, marking an all-time high. In 2021, approximately 60% of people had credit card debt.
Remember, it’s essential to learn from these mistakes to set yourself up for financial success.
So, what should you do instead?
Start by setting specific financial goals, such as saving a certain amount each month or paying off your student loans early.
Educate yourself about personal finance through books, podcasts, or my YouTube videos, 😀 there are so many online resources available free of cost.
You can even consider seeking advice from a financial advisor if you are interested in developing a personalized plan for your financial future.
Another very useful tip is to automate your savings by setting up automatic transfers from your checking to your savings account each month.
Cut back on unnecessary expenses, such as eating out or subscribing to multiple streaming services.
I can’t emphasize enough, that if you are carrying any credit card debt, please pay off that high-interest debt first, so you can save money in the long run.
I will totally recommend opening a high-yield savings account to earn more interest on your money. Capital One and Ally Bank are the two online banks I use. As of today, Ally Bank gives you a 4.5% to 5% interest rate on a CD, much higher than traditional banks. Also, CapitalOne is paying a 4.3% interest rate. These can change with the Fed’s decisions so don’t delay and open a high-yield savings account to earn more interest.
Increase your income through side hustles or by pursuing professional growth opportunities.
Finally, surround yourself with like-minded individuals who share your financial goals and can provide support and accountability.
That’s a wrap for today’s post! Don’t forget to hit that like button and subscribe to my YouTube channel for more money-saving tips. Don’t wait to take control of your financial future, start taking action now!
