Being young, wild, and free comes with some painful money lessons. Just ask my buddy James who found freedom itself rather limiting after frittering away his first big paychecks from his post-college job on clothes, restaurants, and weekend trips with his new roomies. “I acted like the cash would never stop flowing,” James admitted. “Then I missed a couple of credit card payments and got slapped with high-interest rates and late fees. Those purchases stopped feeling fun real quick.”

Most 20-somethings like James wish they handled money better and faster. But it’s never to late too to start dodging those dumb financial mistakes you may be making without even realizing it! Let’s break down the top money mess-ups and how to fix them.

Living Beyond Your Means

It’s way too easy to swipe that credit card for little purchases here and there and before you know - BAM - you are cycling debt each month and barely paying down balances. “I just felt like everyone else my age was spending like crazy on new things so I should too fit in,” says my cousin Leila. Don’t fall for that trap! Live below your means instead by creating a reasonable budget based on your income, limiting credit cards, always paying your full statement balance each month, and putting a percentage of each paycheck into savings first before spending the rest.

Not Building Emergency Savings

You’ll eventually face unexpected expenses - job changes, medical bills, car repairs. My first TV died just two months after moving into my new apartment last year. Relying only on credit cards during financial crunches will just create more long-term debt. Start building emergency savings instead with automated transfers from your paychecks so you have a cushion for life’s curveballs. Even $20 or $50 transfers add up faster than you think!

Not Contributing Retirement Accounts Early On

Yeah, I know retirement feels forever away when you are 20-something. Heck, you might not even score a 401k plan at your first job outta college if you're working a bar gig like my buddy Luis did. But here’s the cold hard truth from Ramit Sethi of IWillTeachYouToBeRich - thanks to compound interest, a $100 monthly Roth IRA contribution starting at age 25 can grow to over $174k in 40 years at just a 7% return rate. Not too shabby! But waiting til 35 to start sets you back big time at just $103k. The moral is - to start small retirement contributions whenever possible because time is your best money ally early on!

Not Negotiating Job Offers

Some 20-somethings are just thrilled anyone wants to hire them when first entering the workforce. I took the first job offer I got just to pay rent! But not negotiating salary, time-off and other perks at the start really shortchanges your long-term earnings. After my coworker Amy found out she was making way less than her peers doing the same role, she sat down with our boss to make her case for why she deserved better pay and it worked! Don’t be afraid to advocate for yourself job offer in hand and negotiate before signing that employment contract.

Paying Full Price When You Could Save

Our generation loves convenience even if it costs more. UberEats three times a week, TicketMaster “platinum” fees for concert proximity, brand name detergent when the generic works fine. “I wasted so much money in my early 20’s being impatient and not seeking out discounts,” financial blogger Alyssa Davies admits. With a little deal hunting online, you can almost always lower your costs for anything from laptop clothes to travel and entertainment. Sign up for student, military, or senior discounts. Check Groupon and LivingSocial for local deals first before paying retail. Set up music alerts from artists you like so you are among the first to access pre-sale tickets at lower prices.

Hope this article helped explain the money mess we 20-somethings are prone to making early on plus offer concrete fixes you can start implementing today to avoid debt drama! Let’s pact to show money whose boss the rest of our youth.

We got this!

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References:

• Love, Julia. "12 Money Mistakes to Avoid in Your 20s." Ellevest, Dec 12, 2022. Accessed Dec 17, 2023.
•  https://www.ellevest.com