Avoid these financial mistakes in your twenties and prosper in your thirties.
When you are in twenties, it is a change of everything. Now you are responsible for your life. It is a golden period to learn so many things. You learn either from somebody , books or from mistakes. It is all about learning. You need to study, you have to pay attention to what you want in your future. This is the time when you feel like flying in the sky of unlimited opportunities.
Most of us have money in hands to spend. This is the time when everybody makes mistakes including the financial ones. Studies accumulate so much of debt. Though study is an investment. But it is good to keep your debt to lower levels. Here are some mistakes most of us make which can be avoided.
1. Accumulating student loan
I don’t think that study loan is a debt rather it is an investment. But at the end, a debt is a debt. Try to cut it by starting a part time job. It will ease some financial burden from you and will help you save some money. Saving your self from debt in your twenties will help you in living your life easily later.
Because when you are in your twenties , you always think like you have lot of time on your side but time goes so fast that you even don’t notice. I can tell this from personal experience .
2. Traveling expensive destinations
I know you want to do lot of things in your twenties. And travel is one of them. Keep this dream for later in your life. Concentrate on the things which are important and will let you to reduce the burden of debt. Delaying the gratification is something you should learn in your twenties. It will help you to prosper when you are in your thirties.
It doesn’t mean you should stop enjoying. There are many more ways to enjoy as a young person because you have friends and time to enjoy. You don’t need to go on expensive holidays to enjoy life. Expensive holidays only add to the financial burden.
3. No retirement account
Retirement seems to be far away. Who thinks about retirement when you are in twenties. But it is a good idea to start retirement fund early and build it from your twenties. Try to contribute to your retirement fund early and it will help you to have more in fund by actually adding less from your pocket. Let the compounded interest do the magic.
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4. Having many credit cards
Banks will always send you letters for having more credit cards and also you will be given options for upgrading your credit cards. Means you can now have credit cards with bigger values, and you can spend more. Spending from credit card means you will owe more money to banks.
So stop having many credit cards. Instead stay with one or maximum 2 credit cards . And pay your balance on time. It will save you from paying fees to banks. Better if you can survive without credit cards. It is like spending the money which is not yours.
5. Negative relationship with money
It really matters what kind of relationship do you have with money. It should be positive unless you want to be a recluse. Money is important no doubt but your relation with money is more important. You should think it to be a commodity which withers away with if not taken care of.
It is not the lack of money which makes you happy rather how you put it into work is what makes you happy.
6. Not paying bills on time
When you are young, you are least concerned about paying bills on time. If you earn money, few dollars here and few dollars there just don’t seem to be important. But these few dollars add up in long run. If you pay say 10 dollars every month on late fees, you would have paid 120 dollars in a year.
And in 10 years time you would have paid 1200 dollars more. This is just an example. Pay your bills on time to save yourself from paying extra. Save money and pay bills on time.
7. Skipping financial planning.
Financial planning is something you learn after spending money here and there. Some people don’t learn at all. But think how beneficial it would be to learn this when you are in your twenties. Your bank account will grow exponentially if you start with a planning. Financial planning helps in chasing the money where it is going and from where it could be saved.
8. No financial goals
Personal financial goals are important to build the wealth. I mean I am not talking about the millions of dollars in your account but saving small amounts consistently. This will happen only if you have some set some financial goals for yourself.
Have your financial goals written with time line. Sticking to your financial goals in your twenties always help in having a good amount of savings later in life.
9. Spending on things you really don’t want
Spending on those things that are considered luxury is not a wise thing to do in your twenties. Expensive things always put pressure on your already fragile wallet. Buying an expensive car with lot of debt is a not right thing to do. Instead look form the ways to buy things which you need and are less expensive.
10. Not having a saving bank account
When we start working, we open bank accounts for our salaries. But do we think of start saving right away ? I don’t think so. Most of us never thought of saving enough in our twenties. And I literally regret it now. My bank account was almost empty most of the time.
I started saving little bit but was not consistent about it. And I could feel
We all make lot of financial mistakes in our twenties. But the problem will only arise if we will not learn from our mistakes. Fix the mistakes by saving aggressively in your later years and by starting saving as soon as you learn that saving is better than spending.