10 Money Mistakes To Avoid In Your 20s

You’ve entered your 20s, completed your internship, finished your degree and now you’re ready to enter the real world. After a few interviews, you’ve landed your first job. Congratulations! After a few weeks or a month, you will experience the feeling of receiving your first pay stub. It will not take too long for you to realise that you now have bills to pay and a lifestyle to maintain. Welcome to adulthood!

There’s an unexplainable feeling of spending your own money but hopefully, you will find this article useful and can help you avoid money mistakes in your 20s.

  1. Not setting aside emergency money

I am personally is guilty of this. I always tell myself I’ll do it next time and sometime I would even say there will be no emergency. Until one day, my car battery decided it needs replacement and to make things worse I bust one of my tires. I was so complacent that salary day is just around the corner but obviously things like this cannot wait. Either I fix it or commute to work every day.

Setting a small amount every month is a good thing. You’ll be surprised how money you have saved for an emergency you’ve never anticipated. And yes, you can thank me later.

  1. Not investing and/or putting all your eggs in one basket

Generally, a person in his or her 20s will not think about investment. This is the peak of their life where they can enjoy their money, buy all the stuff they want, eat all the food they could not afford when they were still studying. But investment is another source of income, a passive income as I call it. The same principle applies to the emergency money, set aside a small amount every month that you won’t even feel might be bigger than you can imagine someday.

There are a lot of types of investment; you can put your money in a fixed deposit in your preferred bank. You can join stock market or complete your preferred money challenge. One thing to take note though is never to put all your eggs in one basket. Spread them amongst your selected investment. Imagine what will happen to all your eggs if that basket fell. Check out our 2018 investment post for more here

  1. Not preparing for the future

You are not forever young. You’re not forever in your 20s. No matter how you take care of yourself and your health, your body will age and deteriorate. Somehow medical plan is also considered as an investment but having a medical plan when your health care does not cover your anymore gives you peace of mind.

  1. Failing to allocate your money and budgeting

I can vividly remember the story I heard where they said Sex is the secret to a happy life. Sex means savings and expenses. It has been believed that it is better to put aside a percentage (5 – 10%) of your money to saving and use the remaining for expenses.

  1. Not paying your credit card on time

Spend now pay later! This is the most popular slogan for a credit card. It’s easy somehow to purchase something and worry about paying it at a later time. Don’t get me wrong, a credit card can be useful in some situations. Say you need to book a flight or ticket but don’t have the funds yet, use your card and pay it later (insert credit card slogan here). Credit card points and the rebate is also a feature that you might want to take advantage.

With the generous credit limit offered by most of the banks, it is very easy to lose control in using your credit card. Paying minimum amount to incur interest not to mention late charges. Then that’s when the domino effect comes in, credit card max out, late charges, interest, etc. Here’s our step by step guide.

  1. Jumping into bandwagon

We are in the era where every month new shoes, phones, bags would come out. People go crazy about it. It’s a status symbol. Everyone wants to get their hands on these new items. It’s not bad to reward yourself every once in a while but I will not encourage changing an almost brand new and fully functioning item just because a new hype came out.

  1. Not being a smart traveler

We would often hear people say you should travel to experience life and explore new things. Usually, this is followed by YOLO or You Only Live Once. Travelling is fun but it is also not cheap. However, I can tell you that it is doable with correct planning. It can help you if you have a good credit card where you can accumulate miles and use to book flight tickets. A once in a lifetime experience is priceless but eat, sleep and travel according to your budget and means then it will not ruin your holiday mood thinking how much money do you still have left once you come back from vacation.

  1. Spending more than your means for your ‘ideal wedding’

We all have an ideal fairy-tale wedding but why make it extravagant when you cannot afford to do so. Look for alternatives, do-it-yourself if you can instead of hiring a wedding planner. It can also be a great engagement for the couple. Again, if your budget permits, by all means, go ahead. It is also not bad to solicit sponsors from your friends and relatives. The money you can save can be added to your ‘starting-a-family’ funds.

  1. Biting off more than you can chew

You’re earning you can apply loan to get a new car and house. But think about the monthly responsibility of paying those loans for a certain amount of years. If you can juggle them all at the same time without hurting your funds then you’re doing fine. But if not, my unsolicited advice is to apply and pay one loan at a time. When you’ve completed it you can always apply go for a second one.

  1. Not preparing for retirement

Retirement is something every working individual should prepare. No one, at least that I know of, wants to work in a company until they’re old. Wouldn’t it be nice to have funds to spend aside from the monthly pension you’ll receive?


So there, listed above is the list of money mistakes to avoid in your 20s. I’m sure there can be more if we drill further. If you’re entering your 20s soon take note and avoid committing the same mistake at all cost. If you’re already in your 20s, it’s never too late to correct all this. If you’re in your 30s and you think you’re safe, think again because there is another list of money mistake in your 30s.

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