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.


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Jason Butler is the owner of My Money Chronicles, a website where he discusses personal finance, side hustles, travel, and more. Jason is from Atlanta, Georgia. He graduated from Savannah State University with his BA in Marketing. Jason has been featured in Forbes, Discover, and Investopedia.