We all live and learn especially when we’re young, but here are 12 common financial mistakes people in their 20s make so you don’t have to make them too.

 

  1. Buying a brand-new car just because you can. Congratulations you’re finally not a “broke college student” anymore, but that doesn’t mean you should throw all of your budgeting plans out the window. Hold off on trading your perfectly good car in for a new luxury car. If your car is still safely getting you from point A to point B, think twice about buying the first one you test drive in the dealership lot. Just because you can afford it initially doesn’t mean you’ll be able to long term. Think about students loans you’ll have to pay off, and the car payments you’ll be making every single month for it. Think about if you’ll have to pay for a parking spot every month where you live or a spot in the garage where you work and think about the money you’ll be spending on gas for this new car. You don’t want to get this car and spend a bunch of money on it just to sell it.
  2.  While we’re on the topic of cars, another reason why you should wait and save before you buy a new car is so you can afford to pay for it in full that day. Finance plans for cars are great for the average person who can’t afford to pay that car in full on the spot, but finance plans have interest that will often have leave you paying thousands of dollars more over time than you would if you saved and were able to fully pay for that car initially. Car dealers will often push finance plans because this is how they make even more money, but don’t let them talk you into a finance plan if you don’t need one. Paying monthly overtime is great to build credit but if you don’t need to, don’t.
  3. Sticking with the car topic for a little bit longer, let’s talk about car rentals. Most people don’t know that you can rent a car if you’re under 25, but you shouldn’t if you don’t have to! If you’re under the age of 25 and you’re renting a car they will pile on the fees and most of the time each fee is per day! Turo is a great tool to use if you need to rent a car but you can’t afford the fees that will be piled on at the rental counter. Turo allows you to rent cars directly from the host in whatever city you’re looking to travel in, it’s like the Airbnb of car rentals!
  4. Don’t let your expensive taste get the best of you. Designer bags and other expensive fashion accessories will trick you into thinking that they are something you’ll love and cherish for the rest of your life and thus worth the price, but don’t be fooled! Your personal style changes so quickly, spending hundreds or thousands of dollars on high-end designer items just aren’t worth it.
  5. Not realizing the importance of saving money when you’re young. Get in the habit of saving more than you’re spending, even if that’s only by a few dollars, have $10 in savings is better than having $0.
  6. Think long term when furnishing your first apartment. Yes, we all have an interior designer in us just waiting to come out, but when you’re choosing a theme for your new place try to remain in an overall neutral color-scheme. By all means, add pops of color in rugs and throw pillows, but just because you’re in love with rose gold today doesn’t mean you will be forever. Do your just to keep the large, expensive items you buy for your place neutral so you can utilize them the next time you and when your style changes.
  7. Don’t break your lease! Breaking a lease for an apartment is incredibly expensive, so if you don’t absolutely have to move before your lease is up, don’t. This is why it’s important to think long and hard before you re-sign, and you’re locked in for another year.
  8. If you receive a parking ticket or a toll fee, pay it immediately! Those tickets and fees will add up the minute you’re late to pay one and paying more because you didn’t pay on time is so frustrating
  9. Don’t spend more than 30% of what you make in your living situation. Yes, we would all love that beautiful apartment with the view of the city, but do we need it, no. Don’t live somewhere super nice if your entire paycheck is going to your rent, it’s just not worth it!
  10. Don’t fall for any scams. This can go for so many different things but the short of it is, if it seems too good to be true, it probably is. Be smart with your money and don’t be fooled by pyramid schemes.
  11. Plan your travel at least a month in advance. Flights for last minute trips will cost you triple what they would have been if you weren’t booking at the last minute. It’s so frustrating to think that the person in the seat next to you paid $150 for their plane ticket and you paid $400.
  12. You’re not a celebrity, you don’t need to be paying celebrity prices for your beauty services. We all love and deserve to be pampered but we’re not under the same microscope that a celebrity is, so why are we going to a salon with celebrity prices?

Leave a Reply

Your email address will not be published. Required fields are marked *