5 Financial Mistakes to Avoid in Your 20’s
Life in your 20’s can be tough. You’re just starting out in the real world, trying your hand at this whole “adulting” thing, and likely finding that your first few jobs look a whole lot different from what you expected. While the movies may make it seem like living and working in the big city is exceptionally glamorous (and, sure, at times there are some definite perks), by and large, this portrayal is far from reality. Between paying off the student loans, trying to eat well (enough), making time for a casual workout (because climbing the stairs of the Subway just isn’t cutting it), keeping your relationships afloat, and somehow still managing to make it look effortless on Instagram, most people in their 20’s are just trying to survive.
If you’re one of the many twenty-somethings trying to make sense of this life stage, take comfort in the fact that you’re not doing it alone. It can be a huge learning curve, but this decade does offer you the chance to lay an incredible foundation for yourself going forward. It may seem hard to believe, but financial decisions you make during this timeframe can have an amazing impact on your future. If you’re not quite sure where to begin but know that you don’t want to be looking at your bank account in ten years like you look at your insta-stories after a night out (…it happens to the best of us), then consider our suggestions below on the five mistakes NOT to make during this incredibly pivotal time in your life.
Mistake #1: Being way too lazy about Student Loans
Paying for things that don’t bring you joy would likely go against Marie Kondo’s advice, but trust us, incurring lots of unnecessary interest expenses is also no fun. If you’re one of the many, many young college graduates saddled with student loan debt, then it’s time to form a plan. Creating a budget and making your minimum payment each month is vital. If you’re concerned about being able to dig out of your debt, consider meeting with a financial professional who can help you implement some changes and form an achievable, strategic plan. Whatever you do – don’t ignore your debt. It won’t ignore you, and you’ll end up paying way more in interest than you need to.
Mistake #2: Living WAY beyond your means
It is awfully tempting to live in the gorgeous new apartment complex with the pool on the rooftop or to sign up for every fun social event your friend group decides to do, but keep in mind that these decisions can inhibit your ability to get ahead financially in your 20’s. So, you might be wondering, how can you save money but still be social? By budgeting and planning ahead, of course! If budgeting is new to you or seems like a lot of work, check out the many wonderful personal finance apps out there that will undoubtedly make tracking your expenses much easier (more on this here!). After a few weeks of tracking your expenses, you’ll likely have a few ‘a-ha’ moments and may find ways you can eliminate some expenses.