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10 Common Money Mistakes People Wish They Realized In Their 20s

10 Common Money Mistakes People Wish They Realized In Their 20s

Do you want to be financially secure? Many young adults in their 20s make money mistakes through lack of knowledge, which can result in debt and financial insecurity.

It is important to get on top of your finances now – check out 10 common money mistakes people wish they realized in their 20s.

1. Spending to make themselves feel happy

Many young adults who spend too much money do so because it temporarily helps them to feel good, but mixing money and feelings can be dangerous.

Avoid going shopping if you’re having a bad day – the temporary fix from emotional spending will pass quickly, but actually saving will leave you happier and more fulfilled in the long-term.

2. Not having emergency savings

When you’re in your twenties, having enough money in your bank to pay rent and buy food and a few drinks can feel like more than enough.

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However, planning for an emergency could really help you later down the line – and if there isn’t an emergency later on, you will have savings for a car, or a little to help with the deposit on a house. Try to have 6 months of living expenses saved up as a safety net for the future.

3. Choosing not to make investments

Investing may seem boring and confusing, but it can really benefit your finances. If you do decide to make investments, ask professionals for information and advice.

A bad investment is a waste of money, but once you have some tips and knowledge behind you, you could make an investment that changes your life financially.

4. Being frugal and failing

Often young adults in bad financial situations commit themselves 100% to getting out of debt and saving up, leaving no money for anything extra. This can get very dull very quickly, and can actually result in binges of high spending.

This is no way to live; instead, factor in a small amount of weekly money for fun. Make sure it is a small amount, but you can spend it on whatever you want. This is more likely to help you to save and pay off debt, as you are far less likely to binge spend your money.

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5. Moving out too soon

After a whole life of living at home, many young adults can’t wait to move out and get their own place. While this is fine for many people, it is worth considering staying at home for a little longer as it is a great opportunity to save lots of money.

Ask yourself; do I need to leave immediately, or could I leave in 3 months? How much money do I want to save up before I move out?

6. Not setting long term financial goals

Most people in their twenties have short term financial goals, like paying their rent and bills. However, if you can afford to set short term financial goals, it is likely you can afford to set long term ones too. Decide how much you want to save in a year, and start working towards that.

One day, you may want to start a business or buy a house – setting long term financial goals will make these things possible.

7. Ignoring their employment benefits

If you work in a company, you are probably making small monthly payments towards retirement and healthcare. Many younger people see this as a necessary evil, but it is much more beneficial to you than the company you work for.

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Take some time to look at the terms and agreements surrounding these monthly payments, and see if you could alter your payments to take advantage of any extra financial benefits.

8. Staying in credit card debt

Credit card debt is one of the biggest financial issues for young adults, with interest rates averaging around 16%. If you choose to make the minimum monthly payment, you may be paying off your cards well into your thirties, when you will have other expenses that need paying.

It is difficult to save with debt, and even more so if there is interest too, so try to focus on paying off your credit card debt as soon as possible.

9. Choosing money over growth

Many young people take job offers with a good wage, turning down positions with a lower income but much more opportunity for growth.

It is important to choose growth over money; these learning opportunities and chances for promotion are invaluable, and it is likely you will end up with a much better wage than the first job after a short amount of time.

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10. Spending too much on unnecessary extras

The new iPhone or expensive hair extensions; can you really afford these costs on your current budget? It is important to treat yourself to things you love, but it is also important to sit down and work out if your outgoing expenses are too high.

Before you buy a high-end, luxury product, ask yourself these questions; can I really afford this? Do I need this? Why do I want it?

Featured photo credit: xvire1969 via flickr.com

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Amy Johnson

Amy is a writer who blogs about relationships and lifestyle advice.

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Last Updated on June 26, 2020

25 Easy Tips on How to Save Money Fast

25 Easy Tips on How to Save Money Fast

“How to save money fast?” This is the question asked by all of us not in the top 1% of rich people.

If you are looking for ways to drastically reduce your expenses immediately, first look at what you need to spend money on every week. And I mean really need.

You don’t really need to order in food. You don’t really need to buy expensive perfume.

Building from that, you can work out how your regular expenses can be reduced.

As for irregular expenses, they can also be deceptively costly in the long run. Once-off buys can also be tackled with some prudent planning and a little extra research.

And remember: a budgeted lifestyle does not mean a bad or boring one!

But first, understand what budget you can cut down on daily:

  • Regular expenses for the average adult (can be trimmed but not eliminated):
    • food
    • rent/mortgage
    • cell phone
    • insurance
    • socializing/entertainment
    • transportation
    • hygiene products
    • household bills
  • Irregular expenses for the average adult (can be eliminated or cut down a lot):
    • travel
    • clothing
    • medication (*depends)
    • grooming (hair, nails etc.)
    • gifts

Now, let’s dive right into the 25 ways to save money fast:

Save Money on Food

1. Bring a stock of food to the office/work

Instead of popping out for an overpriced salad and a smoothie, leave a set of basic utensils at the office as well as a stock of non-perishable goods such as tinned fruit, tuna, rice crackers and so on (try to avoid the junk food and this can turn into a pretty great diet!).

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Stocking up means you won’t forget or say “I didn’t have the time” when you rushed out to work in the morning.

2. Buy the store-brand version

Many basic foods, such as bread and milk, will taste exactly the same as their branded alternatives. Go for stuff with minimal additives and preservatives. Meat in a tube is probably insanely unhealthy!

3. Eat cheaper cuts of meat

Learn how to tenderize and flavour cheaper meat and fish, and save on the (typically) most expensive item on your grocery bill.

4. Have group dinners

If 10 friends put $5 each in the kitty, it’s pretty easy to make a giant lasagne and get refreshments, as well as hang out with your favourite people.

Save Money in Transport

5. Get a bicycle

Save on gas money and bus/metro fares with this underrated mode of transport.

6. Use public transport and/or don’t get taxis

Some places can only be reached by car. But as a good practise, check your public transport website and see if any routes pass nearby where you need to get to. Walk as much as you can.

7. Find the cheapest gas

Regularly check out where the cheapest gas can be bought.

Save Money in General Shopping

8. Shop online

Not only will you save on the gas or transport fares from going to the shopping mall but you will also find better deals

9. Sell your old stuff

Get your unwanted belongings up on eBay ASAP and earn a few dollars.

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Here’re more ideas for you: 25 Things to Sell to Make a Lot of Money

10. Bulk buying stores

For regular non-perishable/slow perishable purchases such as toilet paper, cat food, pasta, washing powder and so on, do an epic stocking-up trip to a co-op or equivalent (my mum used to go to a place that restaurants buy from).

Be wary of supermarket “deals”, as some have been found to be fraudulent after working out a simple calculation.

11. Become a flea market/car boot sale/street market guru

You can find original gifts and develop good negotiation skills at these places.

12. Generic brand medication

More often than not, the generic version of paracetamol and other basics work the same as the branded version.

13. Choose deodorant, not perfume

It blows my mind when someone drops $70 on a bottle of spray. Stick with a nice deodorant, and not only will you smell just fine but you’ll be sweat-free as well!

Cut Down on Household Expenses

14. Printing

Ink is one of the most expensive substances in the office and coloured ink is doubly so. B

e more efficient and choose black and white, and if your printer doesn’t have a print-both-sides options, just print odd pages first, re-insert the paper and print even pages.

Expand the margins of what you are printing as often as you can to save on paper.

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15. Minimize SMS and phone calls

A combination of a free chat service such as WhatsApp and a free call service such as Skype can reduce your bill to nothing (so long as you have a decent Wifi connection).

16. Shop around for insurance

Most people don’t spend enough time searching for the best insurance deal.

Keep a watchful eye out for deals and new competitors in the market.

17. Try re-negotiating your rent/mortgage

If you have built up a good credit history or a good rapport with your landlord, then chances are a frank chat about needing to tighten your spending could result in lowering your payments. You’ve nothing to lose from trying.

18. Don’t get a TV

Invest in a computer/laptop and an internet-only package. You can watch more (and often better) entertainment on the web, and skip the advertisements as well.

19. Pool your internet bill with a neighbour

My apartment building is basically a big old house split into three apartments. There are five of us in total. We pool the internet bill, making it crazy cheap.

Save Money in Socializing, Entertainment And Travel

20. Have house parties

Instead of paying for overpriced drinks, set up a series of in-house get-togethers with your friends. Everyone takes a turn, so it’s not always your house that needs cleaning.

For sound insulation, hang heavy drapes on the walls and windows. For music, invest in a good second-hand set of speakers which you can connect to your computer. Let Spotify or Grooveshark playlists do the rest.

21. Open festivals, meetups and events

It never fails to surprise me how much underground stuff goes on around me for free or for very cheap. Find out who runs the blogs and websites that list all the less well-known cultural activities.

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22. Volunteer

If you can’t pay for a ticket, volunteer and get to be there anyway.

23. Housesit

There are multiple housesitting websites offering you the possibility to avoid paying hotels and skip the discomfort of crummy hostels.

Save Money on Hygiene and Beauty

24. DIY beauty

French manicures, pedicures, waxing, eyebrows… pretty much all of these can be achieved at home (and done well) with some practise. There are plenty excellent blogs and YouTube tutorials to help.

25. Fewer haircuts/volunteer at a trainee hairdresser

If you can’t bear the risk of a trainee touching your locks, learn more ways to manipulate your hair as it grows and get haircuts sparingly. Women’s haircuts are outrageously priced in many cities.

Bonus: Effective Money-Saving Tips for Everything

Here’s a summary of what you can generally do to save more money:

  • Share/pool resources. Organize a neighbourhood sharing scheme, common resources for your apartment block or with your friends. Not everybody needs an individual lawnmower.
  • Buy energy-saving everything. The easiest way to lower your bills – replace those lightbulbs!
  • Buy in bulk. Be sensible about it (i.e. make sure you have space!), and drastically reduce weekly expenditure.
  • DIY. Skill up using YouTube tutorials on plumbing and many other essential services so you never have to pay for simple problems again.
  • Research a lot before making a decision. Most money-wasting is the result of poor preparation and planning. Don’t shirk this part just because you don’t like it!
  • Use your network. Your network is full of resources that can ease the pain of budgeting. Ask for help.
  • Stop and think. Do I really need it?

Unfortunately, there are some things that require plain ol’ giving up for the time being. This can include high-cost sports such as skiing, the latest versions of some technologies, the finest brands of food/drinks, premier seats at the opera and most other indulgences.

What is important to remember during lean times is that when you look back on your life, it will be the experiences that stand out, not the extra comforts.

Living on a budget can teach you a lot about how much you can really get out of your paycheck. We only live one life, so make the most of every penny you earn!

More Tips for Personal Finance Management

Featured photo credit: Unsplash via unsplash.com

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