Money Mistakes to Avoid In Your Twenties

Let’s be honest. Your twenties are weird. You could be twenty and are enrolled in your third year of college, or you could be twenty-five have a baby on the way, or even twenty-nine and onto your third promotion. ALL IN YOUR TWENTIES. Being an adult is downright hard. You're tasked with trying to establish your career, having your own place, managing your finances, and maintaining a social life. And it all comes down to….money.

Managing your money can be a bit overwhelming, especially if saving or budgeting isn’t your “cup of tea.” But, we’re here to help you avoid some money mistakes you may (or not) be making.

There’s nothing wrong with this mentality – it often encourages spontaneity and adventure. But what comes after today? Tomorrow. You need to think about your long-term goals and financial strategy. What are you going to do if you unexpectedly lose your job? Do you want to get married? Do you want to retire one day?

Sit down and determine what you want your future to look like. If you’re worried about job security, start an emergency fund. If you’re looking to get married, start setting aside money to make your dream wedding a reality. And, it’s never too early to start thinking about retirement. It may seem lightyears away, but it’s amazing to look at how much money you can save if you start early. Start contributing to a 401(k) or a Traditional or Roth IRA. Whatever your future goals are, be proactive and start planning.

Budget ≠ Restrictions. Many people equate a budget with restrictions, but it doesn’t have to be. Creating your budget goes hand-in-hand with reaching your financial goals. Sit down and look at your monthly income and expenses.* Think of your new budget as your roadmap to your financial success.

*Make sure you’re being realistic with your budget. If you prefer to eat out a few times a week, make sure your budget reflects that, and your plan is something you can stick to every day. 

Waiting for your paycheck to hit your bank account can sometimes feel like forever and once it hits, your wallet is suddenly on fire. There’s no reason you can’t treat yourself to a night out, but there’s a difference between rewarding yourself for making it to the weekend and spending way above your means. Try to nix these habits before it turns into a bigger problem.

A good way to combat this is to open a savings account and set aside a certain amount or percentage of each paycheck to be deposited. Many employers offer the ability to split your direct deposits, this way you don’t even see the money in your checking account – out of sight, out of mind!

There are plenty of warnings about credit card debt that you’ve probably heard, so we don’t need to go into much detail. Those cash-back and/or rewards can be awfully enticing. But before you jump in, are you someone who can pay off your card in full every month?

Another tip: If you’re the one making the arrangements with your friends, don’t volunteer to put it on your credit card. It might be tempting to rack up all those extra points, but trusting yourself to use the money they give you and putting it directly on your card is risky business. If you’re someone with self-control, then, by all means, rack up those points!

Less than 40% of workers negotiated their salary during their last job offer. Sometimes it’s just easier to accept their offer and call it a day. “The average U.S. employee could be earning $7,528, or 13.3 percent, more per year than his or her current annual base salary,” estimates Glassdoor. Negotiating will always be a little awkward, but employers won’t fork over any extra money without being prompted. You could be missing out on some serious cash.

If you need guidance on your financial journey, stop in and speak to a branch representative today to find out how we may be able to help. Best of luck in your twenties!