9 Financial Mistakes to Avoid in Your 20s

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financial mistakes

Most of my 20s were a wonderful time. Some years were better than others, depending on my situation. I graduated from college (Savannah State University) at the age of 24. I also had the chance to live in beautiful cities such as Savannah, GA, and Orlando, FL. I did a lot of things right during that time. One thing I should have done better was to take good care of my finances. I made many financial mistakes in my twenties that I wish I didn’t. I don’t want that to happen to you. I wrote a post titled nine financial mistakes to avoid in your 20s. Keep reading so that you avoid making the same mistakes.

Financial Mistakes to Avoid in Your 20s

Save More

I always had a job or a side hustle during college. I never really experienced being a broke college student. I saved a little money here and there, but looking back, I could have easily saved a couple of thousand dollars for a “rainy day.” Once I graduated from college, a couple of “rainy days” happened. Having a decent savings account could have helped me struggle less during those times. Those were some tough times, but I was able to make it. If you are looking for a savings account for your rainy-day fund, check out the Capital One 360 savings account. I’ve had an emergency account with them for years. I have a certain amount of money automatically deposited into that account each month. They offer a $25 bonus for new users who deposit $250 or more.

Click this link for more info.

Pay Attention to Interest Rates

I didn’t fully understand interest rates until it was too late. I could have saved myself some money by taking the time to read my statements and get a proper understanding of my interest. I could have chosen a credit card or a student loan with much better rates than my current ones. I also could have kept my balances lower. That way, the interest I was charged monthly would have been lower. It’s crazy the things that you learn after the fact.

If Traveling With People For The 1st Time, Get Money Upfront!

I’ve had a couple of situations where I’ve had to pay extra money on a trip because people canceled at the last minute. It’s not a good feeling having to pay an additional $200 for a hotel room when you didn’t budget for it. Fortunately, this hasn’t happened to me since 2007, but I can still remember that extra charge to the credit card like it was yesterday. I’ve ensured that will never happen again by getting money from people in advance.


I would have done more investing. I currently have a retirement plan with my job, but if I were on my game in the ’20s, I’d have at least double that amount saved. Even if I had put some money in a mutual fund, that would have been better than nothing. A couple of years ago, I started investing with Robinhood. They allow you to purchase different stock from your cell phone via their app. They give all new members one free stock share when they open a free account. Robinhood is suitable for beginning investors. You don’t even need a lot to get started.

Check out: Best Investment Apps for Beginners

Paying on Student Loans

I promised to be the king of deferments and forbearances for at least two years. I thought I was doing it by not paying off my student loans. Fast forward to today. Not only was that not the brightest idea, but the amount I owe to my lenders (especially Sallie Mae) has damn near doubled. Even though I didn’t have the best-paying jobs immediately after graduation, I should have paid at least $50 monthly on the loans. My situation would be a little better than it is right now. This is one of the money mistakes to avoid that I tell people about the most. You don’t have to be in this situation. You have to plan a little bit better or make payments earlier.

I should have done something else in my twenties: refinance my loans. I lowered my interest rate and payment when I was approved a few years ago. There are several lenders out there that you can use to refinance. I went with Earnest. They have a great history of helping people that were in my situation. They are also giving new users a $200 bonus when approved. Who wouldn’t want $200?

For more info, visit Earnest here.

Using Credit When I Had Cash

In 2017, I paid off my credit card debt for the 1st time. If I were smarter, I would not have had it this long. I could have paid for a few trips back in the day with my debit card. Also, I could have relaxed on some Irish Car Bombs for my friends and me. I wasn’t a reckless spender, but I made some stupid mistakes. Don’t be like me if you can help it. This is one of the most critical financial mistakes to avoid.

Learn How to Create a Budget

Creating a budget is essential to have control of your finances. Before making a budget, I had yet to learn where my money was going. I knew it didn’t go to paying off my student loans or credit card bills! That has changed because I have a handle on things now. It’s not like I even spend that much, but I know how to plan my money to save and provide for my future. This is also another one of the money mistakes to avoid. It will help you save and invest more later on.

Budgeting has become very popular these days. There are tons of budget planners out there that you can use to help you create your own. One of the free ones that I’ve used before is Mint. It’s a very user-friendly application that will help you organize your money.

Never Setting Financial Goals

I thought that I was prepared for the future. I didn’t plan to become rich since my job was one of the most boring things in the world. I just wanted to survive. I got by, but I should have planned better. In my mid-twenties, I realized I should have set financial goals. If you want to be successful later on, you better start planning those things.

I never made a serious plan to improve my financial situation. I didn’t even look at my savings or see how much money I had left. I just worked and played. That’s a dangerous way to live. I should have become more organized and thought about what I needed to get where I wanted to be. I have my goals now, but I should have had them sooner.

If you want to be successful, start setting goals for yourself. You might only achieve some of them, but you can try to get there at least. You can’t change what you don’t know, so do your best and don’t worry too much about other things.

Not Setting Up a Retirement Account

I only thought about retirement once I started working on the blog. I’m a little further along in my career and am better off financially than in my twenties. I really should have set up an IRA account a few years ago. I would have had much less stress and would be better positioned to retire someday. Even if you aren’t making that much money now, you should start saving for retirement. You can save $5 or $10 a month. After that, you can put in whatever you can afford to. It’s essential to have your retirement accounts established before it’s too late.

Now that I’m in my 30’s, I refuse to let those things happen again. Over the past couple of years, I’ve improved my finances. I know this is a struggle for many people. There are a few places online that can help you get organized. Personal Capital is a website with a free tool that shows you your net worth, among other things. I hope you took something from the list of financial mistakes to avoid in your 20s.



  1. One thing I would tell someone in their 20’s to do today is to stay away from high street stores unless it’s absolutely necessary. Buy only the things you need and not the things you want.

    Thanks for the insight.

  2. Hire a financial adviser. This should be every college graduate’s gift and if you didn’t attend college, you should invest in getting one before 25.

    1. Thanks for commenting. Excellent tips!

  3. I handled my general finances well in my twenties, but I didn’t really look at the financial feasibility of the degree I was seeking and whether or not teaching English was the right career choice for me both personally and professionally. I often encourage my niece and nephew to really look at the financial prospects of whatever field they go into. Money isn’t everything, but why not pick a potential career with the best financial outlooks?

  4. Definitely all these! But never too late. 🙂

  5. 1. Not taken out a store card.
    2. Saved £100 each month.

    My advice
    1. Save as much as you can
    2. Start a pension plan the minute you start working
    3. Stay away from credit cards
    4. Live within your means
    5. Choose a degree course that guarantees you a job with a good income.

  6. Good advice, Jason. I was very much a broke college student. I paid my own way with loans and an almost full time job my senior year. Luckily my parents instilled a lot of money sense in their kids, so I had that on my side, but I still wish that I had always, diligently, tucked even $5 a pay into a savings account. Now in my fifties, that then would make even now better!

  7. What I would do different is put 10% of my pay into some kind of savings plan – just think what a difference that would make over 50 years. If treated it as a living expense it would just become habit and you wouldn’t even miss it. Big sigh – too late for me now.

  8. Great tips about saving, investing, learning about interest rates, etc.

    However, my favorite is “If Traveling With People For The 1st Time, Get Money Upfront!”

    I can’t tell you how many times not doing this has bit me in the ass…

    1. It’s not a good feeling when you have to pay more for a trip due to people backing out smh.

  9. Great post! Without hesitation, if I could re-write my 20s, I LISTEN more.

    That, and not try to date everyone I possibly could…would have saved quite a few dollars…

  10. More 20-somethings should start investing in real estate! I think a big misconception about real estate investing is that you need a lot of money to get started. You don’t!

    My first property was a 4-unit property in a suburb of Los Angeles that I picked up in my 20s. I lived in one unit and rented out the other three. Single at the time, I also rented out the bedroom in my unit and slept on a mattress in the living room. And guess what? Through the FHA program that Elizabeth mentions, I only had to put 3.5% down!

    This was an incredible deal and has proved to be a major boost to my net worth. I’ll give you 4 reasons: 1) I was living for free while my friends were paying through the nose for L.A. rent, 2) I was building equity as my tenants paid down my mortgage, 3) I was cash flowing hundreds of dollars a month, and 4) I got 4 units an hour from Downtown L.A. for a mere $15,000 out of pocket, and the property has already substantially appreciated.

    The FHA fourplex strategy really is a no-brainer for single Millennials. If one does nothing else in real estate, they will have succeeded by getting into a fourplex as a young man or woman with only 3.5% down.

    Assuming the rents cover their expenses, in 30 years when they’re in their 50s and the mortgage is paid off, and they’ve done the smart thing by raising the rents over the years, they will be sitting on a million-dollar asset that cash flows thousands of dollars per month at the cost of a measly $15k or so out-of-pocket when they were 20-something.

    I can’t think of any better way for young people with limited resources to prepare for their future so early on in life with so little cash out-of-pocket.

    1. Hell of a freaking plan.I’m still shocked at only having to put 3.5% down. I may need to see if there are any fourplex units available near me.

  11. Man there is soooooo much I would do differently in my 20’s, lol! The number one thing I would do would be to not take out more student loan money then I needed. I thought it was cool because everyone else was doing, man stupidest thing I have ever done!

    1. I feel you 100 on the student loan thing. I wish I would have bever met “Sallie”.

  12. I graduated at the age of 22 and got married that same year. A year later we bought a house. By age 30 we had more than enough in savings to pay the house off and were having the first of our three kids. I think I wouldn’t change a thing. We’ve been married 43 years now, still in that same paid for house. I think we did our twenties just right.

    1. That’s awesome. I wasted my 20s, but I’m finally making up for it now. Looking forward to the next few years being epic.

  13. Great post. I wish I had this advice 10 years back. Financial goals starting at 20s are so important.

    1. Thanks for reading. I wish I followed this advice bak then myself.

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