Your 20s are quite likely some of the most formative years of your life. Whether you’re moving out on your own for the first time or planning a career after college, it’s very easy to get overwhelmed and make the wrong decisions.
Many of us tend to question the decisions that we make in our 20s and as a result, insecurity, depression and frustration become commonplace.
While there isn’t a set pathway to success, there are plenty of mistakes that you would do well to avoid. Having walked on this road ourselves, here are 4 mistakes that anyone in their 20s should avoid.
1. Financing your life with credit
Credit cards can be a godsend when properly used. They provide you with a degree of flexibility in your financial planning and can be a source of free cash.
Hence it is rather unfortunate that many of us in our 20s tend to abuse this privilege by using credit cards to finance our lifestyle.
Credit cards have a nasty way of lowering our inhibitions when it comes to spending which is why it’s no surprise that credit card debt has grown exponentially over the years with more and more people struggling to pay off what they owe.
Rather than falling into the trap set by banks, you should instead focus on living within your means and reducing your spending,
2. Failing to have a plan for your finances
Financial planning is a skill that both school and universities often overlook. Sure you can calculate the square root of 36578 but when it comes to planning for your financial future, education teaches you diddly squat.
Sure, you’re underpaid as heck but it’s also your problem if you find yourself living from paycheck to paycheck.
The first step to adulting is to take responsibility for your financial wellbeing. After receiving your first paycheck, the next that you need to do is to open a forced savings account. Forced savings plans work by deducting a set amount of cash automatically from your account every month.
So, if you’re the type who doesn’t seem to have any discipline, you won’t need to worry about putting aside some cash as the bank does it for you. From here, this cash that you’ve put away can be the basis for your nest egg.
3. Getting hitched while you’re not ready
Okay, okay, okay – before you crucify me, let’s get this out of the way first.
A study released by the APA revealed that 30 percent of marriages fail because of conflicts related to money. While we all want our happily ever after, marriage is all about making it work with your partner.
If you and your partner are financially unstable, getting hitched should be the last thing on your mind. Squabbles and arguments over money can seriously hamper all of that marital bliss and will lead to resentment and frustration.
An already bad situation can be further complicated with the arrival of a brand-new bouncing baby. While kids are an absolute treasure, they are rather expensive and will result in additional expenses that you don’t need.
Hence instead of bowing to societal, religious or familial pressures, sit down with your partner and discuss the viability of getting married. It’s best to ensure that both of you are on the level and have the same expectations.
4. Not focusing on your side-hustle
They say that youth is often wasted on the young, which makes plenty of sense when you think about it. Being in your 20s, chances are you still have plenty of energy and free time which can be put to profitable use.
Rather than spending time binging on Netflix or surfing the net, you should ideally focus on earning some extra cash.
Take up freelancing and discover your passion or take on a side-job to expand your network. Given the unpredictable nature of today’s world, you’ll never know when your main source of income could dry up. Maybe you will discover you have a talent for poker or for online betting on golf (still, wage responsibly).
Time is of the essence and it waits for no one. Use your youth to learn and grow as much as you can before it’s too late.