Let us face it- Adulthood is not easy. The moment you are left to soar to life on your own as an adult, it may not be as fun as when you were dependent. One key area that affects you as an adult is your finances. If properly managed, you would have no issues but if otherwise, it would be the accumulation of debts. Nobody wants to go that path.
Money management is key to helping you attain financial prosperity. There are some things you ought to be doing as an adult to secure your financial future. Here are 7 money mistakes to avoid making in your 20s at all costs:
1. Not planning for the future
Planning your financial future is not something that old people need to worry about. You need to think about your long-term goals and financial strategy in order to successfully manage your funds. Do you want to purchase a home soon? Do you ever want to retire? What are you going to do if you unexpectedly lose your job? Sit down and determine your future plans. Be proactive and start planning now.
2. Having no budget
Having no financial budget is like going to a place with no map or direction, you will get lost. Setting a budget goes hand-in-hand with determining your future financial plan. It can be all too easy to lose sight of your income versus your expenses on a monthly basis. Ensure you take a hard look at your monthly income and your average expenditures in order to establish a personal budget. Be realistic when setting your budget. Setting a budget doesn’t mean cutting out all of your fun and frivolous expenses. It’s just a way to track where your money goes and how you can better manage it.
3. Relying on credit cards
Treating credit cards like a personal loan program can be detrimental to your financial well-being. Don’t rack up a large balance on credit cards. Their interest rates are astronomical, and you will quickly find yourself in a debt crisis.
4. Refusing to ask for your worth
It can be awkward demanding your worth to clients or potential employers whether you run your own business or you have been on your fair share of job interviews. Even though sometimes it is just easier to accept what they offer, you should stand your ground and not be afraid to demand what you deserve. You should negotiate from a place of strength.
5. Showing off with money
Social media has not made it easy. It can be tempting to fall into the “keeping up with the Joneses” trap and start purchasing expensive things just for the sake of showing off. Your value and self-worth are not a measure of your finances; so don’t feel pressured.
6. Reckless spending
It is a good feeling to get your first job and your first paycheck. This does not call for reckless spending. There is a big difference between celebrating and going on an extravagant spending spree. It is not only irresponsible to spend money anyhow but also a bad habit that can lead to debt. Establish a savings culture by putting away a certain percentage of your paycheck.
7. Thinking money is everything
Money is good but it is not everything. You should not equate success with money. There are many wealthy people who are still miserable. Success goes beyond what you have in your bank account. Does your job fulfil you personally and professionally? Do you have good friends and family members that make you feel loved and appreciated? Do you make time for hobbies and interests that you enjoy? If you answered yes to those questions, then you are successful.