The good news is, knowing what these mistakes are as early as possible could save them from huge regrets later in life. Here is a list of the common financial mistakes people in their 20s are making:
1. They Believe Health Is Not Important
Health has always been considered as everyone's wealth. However, most young people abuse their health by smoking a lot, drinking too much alcohol, sleeping late at night, and neglecting the importance of a healthy lifestyle. Little do they know, it is very important to watch over their health because being healthy is synonymous to being productive at work.
2. Giving Importance To Assets Rather than Liabilities
Okay, the latest gadgets like iPhone, tablets, and huge TV screens can be so tempting. For most people in their 20s, they find it so fulfilling to buy them. And most of the time, they save money to make these purchases. The truth is, purchases like these are considered dead investments because a few years into the future, they are worthless. Every year, companies that offer these gadgets sell something new. With this, the ones you purchased last year or few years ago tend to decrease in worth or value.
3. The Lack Of Drive To Save Money
Some people believe that they can spend all the money they have because they still have the rest of their life to save. This is definitely wrong. The earlier you start, the more money you can save. Neglecting the importance of saving as early as possible may lead to regrets in the future. You can put at least 10 percent of your monthly income to your bank account.
4. Giving Up Easily
Life is a constant battle. It is always about finding yourself, using your strengths, and standing up whenever life knocks you down. However, some people in their 20s do not realize the importance of staying strong. They easily give up after getting fired from their job, ending a romantic relationship, etc. The truth is, it is not easy to handle such things, however, they should be considered as stepping stones in reaching your goals in life.
5. Using And Relying On Credit Cards
Another common mistake is relying on and abusing the power of credit cards. There are those who consider credit cards as their knight in shining armor everytime they need to buy something. According to financial experts, if you rely on credit cards to pay your bills and other expenses, you are drowning yourself in potential financial problems. If there is a need to use a credit card, use it wisely.
6. Living Without Health Insurance
Young people do not realize the benefits of having a health insurance. They usually believe that since they are young, they are healthy and capable of earning money. However, medical emergencies are sometimes inevitable. Living without a health insurance may lead to huge problems in the future.
7. Being Too Impulsive
People in their 20s, most of the time, are full of energy, dreams, inspirations, etc. They have the tendency to decide on things without a second thought. For instance, they believe that moving to a new town or city is a wonderful way of finding a new direction and meaning to their life. They neglect the fact that you have to be financially stable in order to survive in a new place, specifically if it has a high standard of living.
A Final Thought
Indeed, the key to avoiding financial mistakes is proper knowledge. If you are well-informed of the possible financial mistakes you could commit, then you will be able to avoid them. Keep in mind that it doesn't matter if you start small, specifically when it comes to your savings and investments. As time goes by, you will gain the ability and knowledge on how to make them bigger. Perhaps, killing financial temptations is pretty hard to do for someone in his or her 20s. But the main point here is to avoid financial mistakes as much as possible and save for the future.
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