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Top 3 Financial Mistakes to Avoid in Your Twenties

how to budget money on low income guy in a plaid shirt holding cash Middle Class Dad

Oh, your twenties. Such a magical time. It’s a new and exciting time as you begin adulthood, go off to college, get a real job, rent your first apartment, and live on your own. This might be the first time in your life that you’re in charge of your own schedule, expenses, and finances too.

As you transition into newfound independence, there are a lot of things to figure out, problems to solve, and mistakes to make. But hey, that’s what your twenties are for, right? Making mistakes and learning from them can be a great way to become a better person and a more well-rounded adult.

But why make those mistakes yourself when you can learn from someone else first? Let’s take a look at the top 3 financial mistakes that you can easily avoid with some financial savvy and a bit of planning.

#1. Not Building Credit

Maybe you watched your parents struggle with credit card debt for years and swore the same would never happen to you. Perhaps you made it all the way through college without ever applying for a credit card. Whatever the situation, getting a credit card actually does make good financial sense, especially in your twenties.

Taking out even a low limit or secured credit card and paying it off every month can really help you get on the road to building a healthy credit score. Check your credit scores regularly to keep an eye on how you’re doing. Checking in every so often can give you a good idea of whether your methods are working and will help you find places to improve over time.

Credit Cards

Credit cards are a double-edged sword when it comes to financial security and financial responsibility. On the one hand, they are incredibly convenient and lifesaving in some situations, when you don’t have the funds to pay for an emergency. On the other hand, however, credit cards can wrack up debt faster than you could possibly imagine, with interest rates that make the debt grow quickly over time.

The best way to handle credit in your early years is to get one or two credit cards maximum and use them only for general monthly expenses that you have the funds for. Make sure to pay them off in full every month and watch your credit score soar (without going into debt).

#2. Playing Slots (or Gambling)

Playing slots or gambling of any kind falls under the category of not spending your money wisely or living outside of your means and is a huge mistake to make in your early years of adulthood. Spending a lot of money on hobbies that don’t have an ROI (return on investment), on lavish weddings, on expensive housing, or on toys (car, boat, etc.) to keep up with the Joneses are huge mistakes to make in your early financial life.

If you happen to be a gambling aficionado and slots are a hobby of yours, there are still ways to play responsibly. Due to the competitiveness between online casinos, there are many no deposit free spin offers available to remove the risk, such as the ones over at: Using free spins and free money bonuses can alleviate any expense you might incur, while at the same time, giving you a chance to play something you enjoy.

Spend Wisely

Living outside your means in any fashion means that you’re spending more money than you’re bringing in each month. If you are in your twenties, there’s a good chance you recently graduated college and may have student debt to pay off. It’s not much fun to think about, but creating a budget early on, focusing on which debts to pay off first, is a financial tactic called the debt snowball method.

#3. Not Saving or Investing

When you’re young, you’re not necessarily thinking about emergencies or retirement and therefore, not saving money for a rainy day. This is one of the biggest pitfalls for many in their twenties, as issues crop up that require a bit of cash, and without a savings account, many end up putting it all on a credit card.

Retirement also comes quicker than you think and putting a small percentage of each paycheck away for the future, especially in a 401k or mutual fund is a safe and secure way to plan ahead.

Make a budget

When you’re just starting out in your early adult life, the two most important things to do to secure your financial future are to make a budget… and stick to it. Figure out how much money you are bringing in every month and then deduct your monthly expenses. If there are any funds left, take a small portion each month to put in a savings account for a rainy day, and the rest is for fun and entertainment.

Following these easy tips and avoiding a few mistakes can save you a lot of financial worry down the line. Staying on top of your finances is key and with time on your side, will pay huge dividends in the future.


Jeff Campbell