Financial freedom and not being dependent on parents is what many young adults strive for. Fresh out of school and ready to take over the world. Bagging your first job, and finally receiving that first pay-check, what do you do? Your 20s are characterised as very crucial years to make life changing financial habits.
Here are five money mistakes to avoid in your 20s.
Spending more than you make
According to Prudential Investment managers, living within your means should become your motto. It is imperative to have a lifestyle that correlates with the money that you make. Spending more than you make is not sustainable and can result in one drowning in debt once the bills start to pile up.
Not saving up for retirement immediately
Tshepang Makhetha, a dispute resolution official states that the usual retirement age is between 60 and 65 years. When you bag your first job at the age of 25 years old, retirement is the last thing on your mind. Which should not be the case, avoid falling into the trap that retirement is far and therefore you will start saving up for it at a later stage or when you earn more money. With the little that you earn, start saving up towards your retirement so that your retirement years can be as comfortable as you want them to be Khwezi Jackson Benefit Consultant at 10x Investments added.
Impulsive spending
According to Khwezi Jackson Benefit Consultant at 10x Investments, if it is not in your budget, do not purchase it. Many fall into the trap of spending their money impulsively, which may have a negative effect on their monthly budget. Should you be an impulsive spender, allocate money in your monthly budget for impulsive spending.
Not setting up an emergency fund
According to Prudential Investment managers, emergencies and unforeseen circumstances can happen to anyone, at any time. This is where this fund becomes handy. You can use money you have set aside specifically for emergencies, to avoid unnecessary credit.
Living off credit
It becomes easy to lean towards credit when it seems like you are barely making it through your salary. In your 20s, it becomes crucial to have financial disciple, this will ensure that you keep and maintain a healthy relationship with credit, Deep Patel entrepreneur, marketer and investor added.
