Early twenties is the time when one gets his first job and starts experiencing a new phase of his life. Twenties is also the right age to start planning for a financially secure life. However, due to lack of proper knowledge and experience, there are many young adults who make money mistakes. Such mistakes can result into financial insecurity and debts that could last a lifetime if not fixed in due course of time. Following are the common 10 money mistakes that people wish that they realized when they were in their twenties.
- Not making Investments: Investments could be confusing if you do not have the right knowledge. However, once you get the proper information on where to invest, your financial life can be really very secure.
- Buying a house too soon: There are many young people who want to move out too soon and buy a house for themselves. But consider that if you could stay a little longer at your present place, you could save a lot of money.
- Avoid setting up long term loans: Most of the people in their 20s make short term goals like paying their bills and rent etc. If a person can set up short term loans, it is most likely that he is in a position to set up long term financial goals too which will help in starting your own business or buying a house after a few years. For this, you must decide upon how much you want to save every year and start working on achieving it.
- Not clearing credit card debt: Most of the young adults face this financial issue the most. The interest rates are high and most people in their twenties choose to make only the minimum monthly payment. Chances are that they will pay off their credit card debt only in their thirties when they need to attend to other more important expenses.
- Not taking health insurance: Most young people do not plan for a medical emergency. Medical bills of an unanticipated emergency can turn your life upside down within minutes.
- Unnecessary spending on extras: People in their 20s are very enthusiastic on purchasing the latest gadgets etc. However, it can turn out to be a nightmare if you really cannot afford them. Sit down and ask yourself if you really need it. If not, then restrain yourself from making such costly mistakes.
- Selecting money over growth: Most people in their twenties prefer to choose jobs that pay more and turn down positions that offer better growth while it is always better to choose growth over money.
- Not creating an emergency fund: Most of the youngsters do not have proper savings to cover emergencies. It is important to understand the possibility of losing a job, car breaking down etc. which could become expensive realities too soon.
- Not saving for the retirement: In twenties, retirement may seem to be too far off. According to the experts, it is best to start early so as to enjoy the same lifestyle even after retirement.
- Not paying a little extra for quality stuff: In a bid to save more, many youngsters avoid investing in good quality stuff like laptops, mattresses etc. This will eventually cost them more in the long run.
If the above mistakes could be avoided, you will surely lead a financially secure life not only today but also after your retirement. However, it is never too late to start taking the right decisions.