Your twenties are a tumultuous time. From courtship to education, the temptation to shell out hefty sums is constant. Sail into your next decade financially secure by avoiding the biggest money mistakes made by twenty-somethings:

1. Loving, gettin’ down, or marrying in a way not supported by your income.

Whether it’s rounds of $10 drinks, or shelling out thousands for an engagement, modern courtship is expensive. Remember that you are looking for a partner who shares your values, and one that you can build a future with. Futures require money. Instead of expending it on a wedding, put it toward homes, cars, or anything else your long-term vision holds.

2. College “just because.”

Many young people enter their twenties already saddled with student loans, to be carried throughout this decade and perhaps into the next. Before you commit to an expensive educational path, confirm that your desired career field requires it–perhaps a trade school, certificate, or apprenticeship would be equally effective. If you do not yet know what you want to pursue professionally, work for a year and explore that question. Do you want to find out the answer while you’re making a little money, or throwing it away on classes you may not like or need?

3. Going into debt.

Talk to nearly any financially successful individual in their 40s and 50s, and they will laugh about the days of eating nothing but cheap pasta, hitting up the laundromat, and meeting new friends on the city bus. They had these adventures in their 20s. Now, before you have a family, want to make a career change, or need to buy a house, is the time to pinch pennies. Pinch them hard, and be careful to distinguish between needs and wants–every cent you save will be used in the years to come.

4. Living off credit cards.

What’s a surefire way to end up in spiraling, increasing debt? Living off your credit cards. Limit yourself to one card with cash rewards. Purchase only what you can afford at that moment and pay it off regularly.

5. Borrowing money for cars.

If you’re in your twenties, you don’t need a fancy ride. Period. You definitely don’t need a car note. What you need is a reliable vehicle with great gas mileage. You may not be able to afford a car immediately. Urban areas likely have buses or van pools; rural communities may have ride-sharing boards. Get creative.

6. Neglecting the future.

We never know what the future holds but, with proper planning, we can prepare for it. Start saving for retirement now, with an eye toward investment options that earn tax breaks, such as contributions to a Roth IRA.

7. Harboring illusions about the present.

An appropriate emergency fund includes sufficient savings to cover up to six months of living expenses should you suddenly lose your job. More is better. What if you lose your job, your car breaks down, and a child needs braces, all in the same week?  Stranger things have happened, so start building up your emergency fund today.

8. Forgoing insurance.

You are not invincible. You can either learn that now, or when you are plunged into debt to pay the ambulance fee and surgical costs from a medical emergency, when the other driver sues you after a car accident, or when struggling to replace personal items after a break-in. Shop around for competitive rates, then budget and properly insure yourself and your property.

9. Failing to plan.

A good financial plan is absolutely necessary to maximize your income, help you invest smartly, and avoid unnecessary taxes every year. Invest in an annual session with a financial planning professional, hire a good CPA come tax time, or hit the library and study up on your own.

10. Turning to family and friends.

Relationships end when money gets involved, especially if you borrow and are later unable to pay them back. Preserve your friendships and family ties by going to an appropriate source for loans if you do find yourself in need of extra funds–the bank.

Sound like a tall order? Creating a solid financial state is not easy, but with diligence and perseverance, you can use your twenties to build the foundation you dream of.

Need more specific guidance?  Check out these tips from a professional financial advisor.

Featured photo credit: Jennifer Correa via flickr.com

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