5 Money Mistakes To Avoid In Your 20s
There are some mistakes we need to make for ourselves. Whether it’s an unflattering trend or falling for someone who’s not a good match, sometimes lived experience trumps good advice. You fall down and you pick yourself up.
But some mistakes can be avoided by following good advice.
Here are some of the ways we’ve tripped up in our 20s when it comes to money – and what we wish we did instead.
Mistake #1: Thinking you’ll start saving ‘later’
When you’re scraping by on casual shifts or a part-time gig, saving doesn’t feel like a huge priority. After all, you’re still scrambling to pay your rent every fortnight, why would you think about socking money away into another account and not touching it?
But the problem with this attitude is that there’s never a perfect time to start saving. When you get a pay bump your spending quickly adjusts, and good money management keeps getting deferred. But if you start early, even saving $20 every time you get paid, you’ll be a lot further ahead later on.
How to avoid it: Decide how much you can put aside each time you get paid, and set up an auto-transfer into a savings account.
Mistake #2: Signing up for subscription services you don’t actually use
We live in a time of utmost convenience. A few clicks and you’ve got yourself a meal delivery service or a streaming subscription, so you don’t have to think about what meals you’re gonna cook this week and you’ll never be left thinking “there’s nothing to watch.”
Problem is, these services will keep charging you even if you’re not using them. So you’ll end up with vegetables rotting in your fridge during a week where you’ve got dinner plans every night.
How to avoid it: Make sure you’re regularly going over your bank statements. Next time that charge pops up for things you don’t need anymore, take the time to cancel it.
Mistake #3: Loaning money to a friend
They need cash. You’ve got cash. Problem solved, right? Nope. The thing with lending money to your mates is it can get real awkward, real fast. They say they’ll give you that $180 for the festival ticket next time they see you… and then they bail on your drinks date.
You’re at risk of losing your money or your mate – or both.
How to avoid it: Just say a gentle, “sorry, I can’t spot you.” If they ask why, say you’ve got a personal rule about not loaning money to friends.
Mistake #4: Forgetting about your super
You’re at the beginning of your career, so retirement isn’t exactly dominating your thoughts right now. So maybe you keep four super accounts open because you “can’t be bothered” consolidating them. Or perhaps you’re a freelancer and you know you should be putting money into your super account… but you don’t.
But these bad habits are hurting future you.
How to avoid it: take the time to consolidate your accounts. And if you’re a freelancer, pay your super.
Mistake #5: Not getting paid what you’re worth
Talking about money is awkward. And talking about money with the people who pay you is no easier. So you avoid asking your boss for a pay rise, or you take the first pay offer you get at a new job.
Sucking it up and having that conversation could make a huge difference for your income, so why put it off?
How to avoid it: figure out how much you’d like to be paid, and brush up on your negotiation skills.
Amelia is the Editor of The Cusp. You can find her on twitter @amelia___m or instagram @ameliamarshall.