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Wealth

8 Financial Mistakes Made by 20-Somethings

Money mistakes every twenty year old must know and avoid.

1 Holding too much cash and not investing for years. Time is on your side and the earlier you start compounding returns the less you have to save over the long run.

2 Spending too much of your money to prop up someone else’s education or lifestyle. Friendships and relationships don’t last. Especially ones formed in your twenties. I’ve seen friendships dismantled over a couple hundred dollar loan. It’s good to be generous, but you need to be investing in yourself at this stage of your life.

3 Buying daily takeout food and drinks (yes, including coffee). Waste of money. Plain and simple. A little extra meal planning and you won’t notice the difference…that is except for the extra money in your pocket.

4 Working your ass off for your employer expecting something (other than your paycheque) in return. If you get a promotion and decent pay raise, then great. But many make the mistake of overcommitting to their early employers thinking management will make them whole.

5 Paying thousands of dollars for school, before actually knowing if you’re actually interested in the subject matter and that the education leads to a desired outcome. (Education for education’s sake is for the wealthy, and much of what can be learned in a liberal arts degree can be picked up by reading a few books.)

6 Marrying too early, for the wrong reasons or to the wrong person. Being married to the wrong person is hell. Getting divorced is even worse, and it’s financially devastating.

7 Waiting too long to get married. If you think you will someday want to get married, your 20s is prime time to find a high quality, compatible mate. Added bonus: dual incomes and shared expenses (e.g. housing) makes life more affordable. Of course, divorce is super-expensive so ensure you marry the right person (stable, financially compatible, trustworthy, etc.).

8 Forgetting that you’re in your twenties. This is the decade where you have the freedom and time to do whatever you want. See the world, meet people, invest in your mind and body in multiple ways.