Your 20s will be some of the best times of your life.

The milestones, the goals you set, the people you meet, and the experiences you have make it a great time to learn more about yourself and set the tone for the rest of your life.

Between college, establishing a career and starting a family, you’ll start to develop money management habits that will have short and long-term effects on your future. Being young might seem like it’s the perfect time to make mistakes but it’s also the perfect time to get a head start on securing your financial future so you won’t have to struggle to retire on time or work your way out of a huge amount of debt. Here are 10 financial mistakes to avoid in your 20s and the years the follow.

1. Going To College With No Solid Career Goals

Just because everyone around you is going to college or people tell you it’s the ‘right thing to do’ at this time in your life, you should make sure you have a clear career in mind so you don’t waste time or money at an expensive institution. Going to school for a year with an ‘undecided’ major is acceptable but after your first year in college, you should start getting serious about what career you’d like to pursue and what type of education you’ll need to get there.

2. Not Building Your Credit

Tips to improve your creditGood credit is essential whether you’re in favor of using credit cards or not. Good credit will give you access to the best loan rates (should you ever need it), the most competitive credit cards, and affordable quality housing whether you rent or are looking to buy. One of the most important things to remember about establishing good credit is that it takes time. If you start building it in your 20s, you’ll allow yourself enough time to increase your credit score and look like a reliable borrower to potential lenders.

Equally important is tracking your credit score. Whether you use a free service like CreditKarma, or a paid service like MyFICO (read our review here), you need to track your credit as it grows.

3. Blowing All Your Money on Drinks and Food

Your twenties is a great time to be social and spend time at bars and attend outings with friends. However, dining out every night and buying rounds of drinks at the bar is not required to create lasting memories with the people you care about most. If the people you associate with pressure you to spend money all the time in order to hang out with them, they may not be hanging out with you solely for your charming personality. Utilizing fun and low cost ways to be social along with establishing an entertainment budget will set you up for financial success.

4. Not Opening a Savings Account

Piggy bank and coinsA lot of millennials make the mistake of thinking they need an excellent paying job and a lot of money lying around in order to start saving. Whether you’re making big bucks or not, you should have a savings account to act as a cash buffer. Even something as small as $20/month could make a difference when you really need the extra money.

5. Buying a House Too Soon

I’m personally all for buying a house over renting long term. I’m content with renting for now, but I really want to purchase a house in a few years before I turn 30. A lot of people purchase homes in their 20s and do just fine, but the key is not to rush into anything.

In order to purchase a home that you can afford and be happy with long term, it’s important to have a solid and steady income and a large emergency fund. Houses are not only expensive overall but they’re expensive to maintain. If you don’t pay at least 20% of the down payment, you’ll be subjected to paying private mortgage insurance in addition to the actual mortgage. Not to mention, closing costs will need to be factored in to the expenses associated with buying a new home.

After considering what a huge financial commitment buying a house can be, the reasonable route would be to take your time and work on improving your financial situation before rushing into large amounts of debt.

6. Racking Up Credit Card Debt

Man cutting up his credit cards in order to stay out of debtSpeaking of debt, credit card debt is one of the most common forms of debt young adults have (along with student loan debt). According to a survey conducted by Rent.com, more than three-quarters of renters between the ages of 18 and 24 spend more than they earn every month. Making a habit out of using credit cards to spend more money than you earn each month can leave you with thousands of dollars of debt that could take you several years to pay off.

Like all debt, credit card debt can derail you from meeting your other life goals like getting married, purchasing a house, being able to afford to have children, going on vacation etc. The best things you can do to avoid accumulating credit card debt include living with your means, creating a monthly budget, and paying off your credit card balance every month in full.

7. Failing to Invest in Your Retirement

The key to building a solid nest egg is to start early. If your employer offers a 401(k) plan, take advantage of it whether they will match contributions or not. Compound interest allows you to earn interest on your original investment and if you don’t want to work for 50+ more years, getting started with investing while you’re in your 20s can help ensure your ability to retire on time and achieve financial freedom.

8. Postponing your Student Loan Payments

Postponing your student loan payments is rarely ever a good idea. Unless you’re going through an extreme financial hardship and you’re unable to work earn an income, you should always try to pay something on your students loans even if it’s just the minimum payment. Your 20s and 30s is the best time to pay back all your debt.

No one wants to be paying off student loans forever so it’s best to just get them out of the way so you can focus on your future. When it comes to paying off your student loans, you have plenty of options and should do whatever it takes even if it that means moving back in with family for a year or getting a side job.

9. Going without Insurance

Shows different types of insurance including life, auto, homeowners, liability, burial and moreThis is a mistake that a lot of young people make. Sometimes insurance can seem like a waste of money when you pay hundreds of dollars each year and you never have to utilize your benefits. On the contrary, making sure that you have auto, medical, renters/homeowners, and life insurance can save you even more money (than you would save by being uninsured) in the case that you do have to utilize your insurance coverage. Insurance not only gives you peace-of-mind when you don’t know what the future holds, but it also protects your finances, health and stability, along with the wellbeing of your loved ones. Living without proper insurance coverage is just a risk you don’t want to take.

10. Living above Your Means

Spending more than you earn is something that people of all ages can be guilty of. When the checks start coming in, lifestyle inflation creeps in as well. It’s tempting to want to enhance your lifestyle but when you start spending more than you earn, you sink deeper and deeper into debt. Your 20s is the perfect time to experience new things and work hard to earn the life you want rather than living a life that you can’t afford that you will have to pay for later.

Have you ever made any of these financial mistakes before? I’m sure you’re not alone. What would you add to the list?

Chonce Maddox

Chonce is a freelance writer who’s obsessed with frugality and passionate about helping others increase their savings rate, eliminate debt, and work toward financial stability. She chronicles her journey to becoming debt-free on her blog, mydebtepiphany.com.

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