If I could go back in time and talk to myself
at age 22 -- oh, who am I kidding? There was no getting through to that kid! Not to sound like an “old guy dishing out
all my wise advice to the youngin’s – heh heh”, but if you can still avoid these common
money mistakes people make in their 20s, trust me, you’ll be doing yourself a big favor! 1. Trying to keep up with the Joneses
We all have at least one friend who’s constantly getting the latest and greatest. New phone, designer clothes, nice car, vacations
around the world. And how do you feel? Like a jealous boring potato. But chances are those people are living their
dream in debt up to their eyeballs. Don’t try to keep up with the cool kids
if it means owing the bank a bunch of money, plus interest! 2. Buying an expensive car
I’m not saying you shouldn’t buy a car at all, but this is a balancing act. Most young people want the cool brands that
all the celebs are driving. But you know what? That G-Wagon isn’t just going to put you
in debilitating debt – prices for repairs and maintenance will also be through the roof. That said, don’t go years throwing money
into your old high-school clunker. Know when it’s time to upgrade, but be reasonable
about your budget and lifestyle. I mean, do you really need 500 horsepower
to go buy groceries or sit in traffic? 3. Over-spending on rent
Remember the one golden financial rule: don’t spend more than 30% of your income after taxes
on rent. In fact, split your income 50-20-30. That means 50% goes to rent, food, and transportation
altogether, 20% goes to savings, and 30% on what you enjoy. Also, don’t start fancying up your first
apartment with Pinterest-inspired remodels. Save that for when you own, and that time
will likely come a little later. 4. Moving to the big city
Unless you’re doing it for an awesome well-paid job you’ve been offered, think twice before
heading to a major city. They do have round-the-clock entertainment,
shopping, and endless cultural events, but are you sure you can afford all that at the
moment? You might not even have enough left for the
fun stuff after you pay for your rent, bills, and groceries! 5. Overspending on food
When you finally move out of your folks’ house and you don’t have your parents cooking
for you every day, it’s too tempting to eat out and order delivery for each meal. Fast food might seem cheap, but when you compare
it to cooking at home and packing leftovers to work for lunch, it’s a waste. Also, take full advantage of coupons and deals
on groceries, and look at the price tags! Seriously, a lot of young people just grab
what they need and head to the check-out lines… 6. Diving head-first into credit cards
Your parents might tell you it’s a good way to build your credit, but that’s only
if you’re responsible with that magic plastic card. If it’s too tempting for you to swipe the
credit card on luxury stuff you don’t even need or if you can’t afford to make the
monthly payments, hold off on diving into the credit world. It’s best to wait until you’ve got a decent
job and a reasonable head on your shoulders than to get a card, not make the payments
on time, and ruin your credit. 7. Not caring about your credit history
Now, let’s say you’re ready to take that dive. Great! Again, if you use your credit card responsibly. Make all your payments on time, don’t open
too many accounts at once, and keep the amount of credit you actually use as low as you can
compared to your limit. And don’t forget that your other bills,
like electric, internet, and so on, can affect your score. You don’t get brownie points for paying
those on time, but it can hurt you if you don’t pay and the company reports it to
a debt collector. And check your credit score periodically. There might be a mistake on there, and you
should know so that you can dispute it! 8. Not planning for retirement
Here’s a surprising fact most 20-somethings don’t consider: the sooner you start putting
money into a 401(k) or some other retirement account, the more time this money will have
to gather interest and grow into some serious cash for your golden years. Think about it: if you start saving retirement
money at 25, you’ll have 50% more than if you start at 35! It’s a good idea to put aside 10-15% of
your income just for your retirement plan. Yes, even when you’re in your 20s and retirement
is many many years away! 9. Not taking student loans seriously
Although it’s nice when you can avoid taking out student loans in the first place, the
sad truth is a lot of us are stuck with them for YEARS (even decades!) after we finish
school. My advice is to make your loans your #1 priority
in your 20s, and put the biggest dent in them that you can. Your other choice to put them in deferment
or forbearance (that’s like a pause in your payments) so that you can save up for a beach
getaway with your friends looks so nice! But that big stone ball rolling down the tunnel
chasing you -- trying to crush you like in Indiana Jones is what debt looks like close
up. Once you get older, your money will be going
to all the fun things that come with age. Home renovations, your family, health bills! Come on, make it easier on your future self! 10. Ignoring insurance
When you’re young and full of energy, you feel untouchable. Unfortunately, no one in this world is 100%
safe from any troubles, disasters, or illnesses. Renter’s insurance will save you tons of
money in case of a fire, flood, or break-in. Medical insurance is a must for emergencies
that can otherwise cost thousands of dollars. Have a cushion under yourself in case bad
things happen! 11. Cutting financial corners in all the wrong
ways How can you even consider getting regular
medical check-ups when you’re 20-something, broke as a joke, overworked, and having sleep
for dinner every night because your student loans, rent, and bills are eating up your
whole paycheck? I know, I was there too. But cutting corners at the expense of your
physical and mental health is NOT the way to do it. There are healthier ways to deal with your
financial troubles. Talk to your lenders about getting on a plan
that fits your income. If your pay is really so miniscule that you
can’t feed yourself, then it might be a good time to negotiate your salary look for
something better, or even come up with a good side hussle… 12. Avoiding calculated risks
Yes, changing jobs is a risk, especially when you need money! But if there’s a skill you’ve always wanted
to learn – do it now. If you’ve always wanted to start your own
small business – try it. It’s always easier and wiser to do all those
things before you’ll have to consider the needs of others (like your partner or kids). Those calculated and well-thought-out risks
are often worth it, both financially and life-wise. 13. Not discussing money issues with your significant
other Your 20s are your first step in adulting,
and that often means living with your significant other. And, boy, is that a real test! Instead of all the rainbows and butterflies,
you’ll now be sharing bills, setting aside a certain amount for mutual goals, and talking
about money! Or, at least, finances SHOULD make their way
into your conversations. It can seem uncomfortable to talk about money
with your partner, but you have to do it if you plan to get serious with that person. If you have vastly different views on saving,
investing, and spending, you’ll be unlikely to reach any financial goals together. 14. Getting pets
Hey, I love pets as much as the next guy! But they are expensive, there’s no doubt
about that. Food, toys, vaccines, unforeseen vet trips
(oh, that last one!) – if you’re barely getting by taking care of yourself, how can
you bring in a furry friend and afford all that stuff?? Pets come with a whole slew of financial obligations,
so only get one when you (and your bank account) are absolutely ready. 15. Impatience
I’d say the #1 biggest mistake people in their 20s make, is thinking they should have
their financial and professional life already in order. They expect their first job to be their ideal
career, they want the nicest apartment or house immediately, and nowadays a lot aren’t
willing to settle for anything less than perfect! Listen, you’ll change jobs, there will be
plenty of times when you need to tighten your belt, trust me it’s good for you -- you’ll
have both good and bad experiences – but they’ll all help you in the end. Hey, how do you think I came up with the items
on this list? Been there, done that, and now I’m trying
to pass the word on to you guys! So, how about you? Are you also guilty of any of these mistakes? Let me know down in the comments! And by the way, don’t feel guilty. Just learn from it, and move on. If you learned something new today, then give
this video a like and share it with a friend. But don’t go open any new credit accounts
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