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3 Money Mistakes to Avoid in Your 20s

This post is featured on behalf of Stacey White.

You’re young, carefree, and you have money to burn. Live for today and set the worries of tomorrow aside. After all, you are only young once, and there is so much to buy.

You have just learned to drive, so a new car is a necessity. Your partner demands the best gifts from you to keep the relationship going. Your dress sense needs to keep up with the latest fashion. Live like there’s no tomorrow and enjoy your first decade into adulthood. Are we right? No, of course we aren’t.

Many young adults have that incorrect mindset, leading to money problems down the line. Mistakes will be made. However, you can avoid them by taking heed of the advice given below.

Mistake 1: Living for the short-term

We have already mentioned this above, but it is the most common mistake. You have a long future ahead of you, so squandering your money now will not help you. Instead, look at your goals and start to save money.

Do you want a car? Save up for something decent instead of buying that cheap banger sat on the lot down the road. Looking to get married? You will need a ring, a house, and all the things that go with married life. Want to pursue a career? Remember college and training costs. In short, build your savings to give you a better tomorrow.

Mistake 2: Thinking you are invincible

You will stop thinking you’re invincible when your car runs into a tree, or you fall ill unexpectedly. Nobody is immune to accidents or sickness, and that is why insurance is a necessity for any age. Don’t forego the importance of medical insurance, as your health needs to be your number one priority.

Then remember car insurance. Without it, you aren’t legally allowed to drive anyway but don’t always go for the cheapest option. Going comprehensive will cover you for natural damage and vandalism, as well as a collision. While car insurance is expensive when you’re young, life insurance isn’t. Get your policy in as early as possible while you are still considered ‘low risk’ as premiums will be significantly lower.

Mistake 3: Getting into debt

If you don’t have the money to hand for those life essentials, you may be tempted to take out a loan or a credit card. Our advice is this: don’t! While student loans are acceptable, if you don’t have the means to buy a car or the latest piece of tech, continue to save. Interest rates are often astronomical, and you will be paying back your debtors for a long time to come if you don’t have the income coming in to support you.

If you do get yourself into trouble, think about consolidating your debts into one easier to pay monthly payment, with less or zero interest. If you do get a credit card, pay back the difference as soon as possible, and don’t use it for silly reasons, such as the occasional takeaway. Loan companies will target you when you’re young, thinking you are more susceptible to their sales patter. Be wise, and learn to live without something until you are in a better position to buy it.

Bottom line

You’re young, so you do want to enjoy life. However, you will grow old before your time if you suffer the stress caused by these common mistakes. Be wise, and you will give yourself a better today and a brighter tomorrow.

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