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10 Biggest Money Mistakes to Avoid in Your 20s

10 Biggest Money Mistakes to Avoid in Your 20s

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?

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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.

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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.

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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.

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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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Last Updated on August 15, 2018

30 Fun Things You Can Do This Summer Without Spending Much

30 Fun Things You Can Do This Summer Without Spending Much

Summertime can be a real strain on your wallet. The sun is out, there are people to see, places to be; it’s no wonder you might be short of funds during these sunny months. Not everything has to cost you an arm and a leg.

Take some time to go through this list of 20 cheap summer activities and make some realistic goals to complete as many as you can.

Video Summary

1. Visit a strawberry festival

Summer is prime time for tasting strawberries. More often than not, an area that grows strawberries will have a strawberry festival. Indulge yourself in strawberry pies, jams, cakes and more!

2. Have a picnic

Take your partner or your family to the local park and enjoy a relaxing picnic. Designate each person to bring one food item of their choice to add to the fun.

3. Camp in your back yard

    The summer heat can sometimes make it hard to sleep. Why not enjoy the heat outside in the yard? Pitch a tent or gaze into the night sky.

    4. Take long walks

    Discover something new where you live. Take the afternoon off from your chores and go for a long walk. You may be surprised by what you discover.

    5. Break a world record

    Breaking a world record doesn’t have to be time-consuming. You could even break one on your lunch hour. Give it a go!

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    6. Go on a bike ride

    The number of bike paths on roads in big cities has increased dramatically over the years. Take advantage, and enjoy the summer breeze.

    7. Join a gym class

      The gym is not everyone’s idea of a good time, but why not go with a friend a join a class? Spinning, yoga and step classes are always more fun with friends, and a lot of gyms allow you to pay-as-you-go.

      8. Find a new hobby

      The summer is the perfect time to find a new hobby. Serotonin (our body’s natural “happy” hormone) is produced by the sunshine and will be at a yearly high, which is great for when we want to tackle something new.

      9. Join a sports team

      Not all sports teams are competitive and require huge amounts of your time. Join in the fun with like-minded people, get fit, stay healthy and make some friends along the way.

      10. Make a slip ‘n slide

        Gather your friends, some plastic sheeting, a hose, washing up liquid if desired, and make a huge slip ‘n slide just like these guys. Granted, yours won’t be as big, but you get the idea… it’s fun!

        11. Make a treasure hunt for your kids

        Today’s digital world sees our children more often than not playing inside than outside. Why not create a sense of adventure by making a treasure hunt? Only rule? It has to be outside.

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        12. Visit a free festival

        Towns and cities are awash with free festivals, with themes from film to science. Scout your local area and discover something new.

        13. Visit the zoo

          Let’s face it: we love animals. While browsing news websites and social media networks you’re bound to come across a few pictures of cats. Take a trip to your local zoo for a better experience.

          14. Take a road trip

          Enjoy the open road with a few friends and take a road trip somewhere–anywhere. Just go out and enjoy the sunshine!

          15. Play ultimate frisbee in the park

            Frisbee is always great fun down the park, but why not turn it into more of a competitive sport by playing ultimate frisbee?

            16. Make your own ice cream

            Ice cream is a very versatile dessert. Make a sandwich, enjoy a cone, or simply just enjoy a bowl full. Better yet, making your own ice cream allows you to create any flavor you want.

            17. Invite your neighbors over for a BBQ

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              When was the last time you invited your neighbors over? Do you even know them? Now’s your chance. Just ask each person to bring a food item so costs don’t mount up for you.

              18. Get a summer job

              For many students, summer is the time for relaxation and fun. But who said earning money and being productive isn’t fun? You only get out what you put into a situation.

              19. Attend a charity event

              Attending a charity event is a great way to raise funds and awareness for a cause, meet new people, and generally have a good time. Search for your local charity event today.

              20. Visit a national park

              National parks are a great way to explore nature and learn something new. You could even volunteer and make a difference in helping restore natural habitats.

              21. Visit your local comedy club

                Local comedy clubs are extremely underrated. They are cheap to attend and no doubt you’ll have a barrel of laughs.

                22. Make your own hammock

                  Hammocks are very relaxing, are perfect for summer afternoons and are surprisingly easy to make.

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                  23. Read in your new hammock

                  Now you have your very own hammock, the only thing left to do is enjoy it. Grab your favorite book and read to your heart’s content.

                  24. Watch a movie outside

                  Movies are great. Relaxing outside in the evening is great. Put them together and you’ve got a perfect combination. In D.C, Maryland and Virginia this summer, for example, you can enjoy a huge number of movies outside.

                  25. Take a hike

                    Hikes are a great way to keep fit and see more of Mother Nature. There are countless trails available for you to explore. Why not try some this summer?

                    26. Learn how to fly a kite

                    As a child, you probably had a kite and haven’t touched it since. Why not dust it off and attempt to fly it? It’s tricky, but well worth the challenge.

                    27. Work out at the park

                    American cities are full of parks with ample space for a work out session. No doubt you’ll be happier to work out in the sun rather than a crowded gym.

                    28. Take your dog to the beach

                      One of the many joys of owning a dog is taking him or her for long walks during the summertime. This joy is enhanced when visiting the beach, for both you and your dog.

                      29. Make a summer smoothie

                      Healthy, delicious and perfect for the summer. Not only that, there are countless recipes ready for you to try.

                      30. Attend a free yoga session at the beach

                      No experience needed and all skill levels are welcome. Take yourself and a buddy down to the beach and try some yoga. You’ve got nothing to lose!

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