Don’t you wish that the adults in your life would have told you how difficult it is to actually be one. I would have loved a little warning so that I don’t spend my teen years thinking that after I get a job everything will be great and I will be able to do everything I want.
I mean you are thrust into this world where you have to make decisions your career and managing your own money. Granted you get a little practice while in university, but let’s be honest it’s not the same.
Managing your finances is tough and you are bound to make mistakes along the way. However, there are some mistakes you need to avoid making completely in order to ensure you have a successful financial future.
Here are some money mistakes to avoid making in your twenties
1. Disregarding the Future
We have heard so many version of YOLO which seem great but should not be applied to your finances. Don’t get me wrong I am all up for living in the moment but I don’t think this needs to apply to my money.
The truth is you need to think about your financial future, what do you want to achieve, buy a house, a car or start a business? Whatever your financial goals are, you need to start planning for them now.
Come up with a saving plan if you want to make a big purchase, save up for emergencies and last but not least, start saving for your retirement.
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A common misconception is you can start saving for retirement when you are in your 40s or late 30s, but if you start early you will have a lot more saved up when you actually retire.
You need to ensure that even as you are living in the moment you are preparing financially for tomorrow.
2. Not Setting a Budget
It took me almost a year after getting my first job to come up with a budget and because of this I didn’t really get to save as much as I could have.
It’s very easy to lose sight of your income versus your expenses on a monthly basis. This is why you need a budget, it will keep your spending in control and ensure you don’t spend more than you can afford.
Having a budget doesn’t mean that you can never buy what you want or have fun, it just means that you will do so responsibly without hurting your financial future.
3. Refusing to Demand What You’re Worth
It doesn’t matter if you are a freelancer or are employed. You need to be ready to ask for the compensation that you deserve.
Don’t just accept what is offered especially if it does not reflect the work you do. You should not be so willing to accept poor pay.
4. Using Money to Show Off
Thanks to social media, it’s now easier to compare your life with others. As a result people go to long lengths to make others think they are living the good life.
So you find you are wasting money to impress people online who really shouldn’t matter to you. There is nothing wrong with posting on social media; you just have to ensure that you are not making poor financial decisions because of it.
It’s important to remember that your value as a person doesn’t depend on how much you earn and if your friends make you feel like it does then they shouldn’t be your friends to begin with.
5. Spending Recklessly
Getting your first salary can be very exciting; it’s only natural that you would want to treat yourself as a result. There is nothing wrong with this, however, just ensure you don’t end up overspending.
For example, there is no need to spend half your salary on a new wardrobe yet the clothes you have are just fine. Even if you need new clothes, you need to save for such an expense and not just use your salary.
Instead, cultivate a habit of saving your money. Set up a savings account and save as much money as you possibly can.
It’s important to remember that money isn’t everything; yes it makes life easier but it shouldn’t be the focus of your life. Yes you need to have good financial sense but you should also enjoy what you work so hard to get.