Life in the 20s is quite exciting as it’s the first time you join the workforce and are making a significant amount that is your own. Kudos to that, you’ve finally made it to that new aspirational section of the society who now have the income to spend on discretionary needs.
The gym subscription you desire to get but found a little too expensive. Congrats! You now can afford that. A Netflix subscription or a cup of Starbucks coffee is all you can enjoy from your monthly salary in a new job.
You are ready for new experiences, but amidst all of these, one thing that took you sidetracked is your finances. In the beginning, every month’s salary gives you a dopamine hit, showing that there is money at the end of the tunnel.
Due to a regular stream of income, you can now afford to have a credit card with the help of the One Andro app and find the best banks that have maximum rewards on leisure spending. Without a knowledge of finance, it has become your first mistake to get into the process of making unrelated financial decisions whose consequences one needs to face in their 30s.
Here are some of the money mistakes people make in their 20s and then regret later in life.
No Monthly Budget for Expenses
The common mistake that a person makes when they are in their first job is keeping the money in the bank without understanding the need and requirement of that in the future. Here, the first mistake you are probably making is listening more to your impulse and scrolling through the pages of Amazon, where you find the best product which shows only 1 stock left!
You are spending on that platform without realizing that your bank account is getting depleted, and by the end of the month, you are living based on the amount that’s remaining in your account. Welcome to the living standard of paycheck-to-paycheck.
Heavy Reliance on Credit Cards
Credit cards are the eighth wonder of the world for those who are hitting their first salary and in their 20s. You don’t need to worry about the bill of a particular restaurant or you can afford to spend a hefty amount on a new gadget. Thanks to your credit card, it gives you the one-month credit for your expenses, thus allowing you to spend more and convert the high amount transactions into easy EMIs.
Now, reliance on credit cards most of the time creates a debt problem where a person needs to pay out their debt and also needs to stay concerned about different payments, which leads to a lack of savings for insurance and investing, and spending the entire amount on needs.
Not Preparing an Emergency Fund
An emergency fund is a necessity for a professional as it allows an individual to have the cushion that will enable them to build on that in case of any emergency. In your 20s, the perception remains that one will always stay young and any major health or career crisis is unlikely to happen.
It happens because we are not prepared to think long-term and, therefore, miss the entire convention of long-term thinking.
Spending a Lot on Lifestyle Inflation
A new release of the iPhone or the latest clothes trend from H&M all entice us to make that instant purchase and upgrade our lifestyle. Here, one needs to think again and ponder on whether you need those items.
The mirrors of social media now surround us, and with every scroll, we witness the lifestyle upgrades that people are making. It triggers the deep insecurity we have about ourselves, and to afford that, we take loans for lifestyle expenditures.
The best solution is to consolidate the entire debt with a credit booster loan and that will have a single interest without bothering the person to pay multiple interests. From the Loan Agency or some other platform, one can get help, and with that, you can start the journey of becoming financially free and doing all the things that are needed to secure your financial position in the future.
Finally, it’s important to consider emergency funds and insurance early in a career as it allows a person to develop the fund early and also to have lower premium payments when they are young.
