7 Stupid Things People Do With Money In Their 20s!

#1 Living Above Your Means

It's pretty awesome when you get your first real paycheck. It smells like sweet freedom. But the best way to put yourself back in that financial jail you've been trapped in is to live beyond your means. What does this actually mean, you ask?

Well, you commit yourself to buying a car that you realistically don't need but it looks cool so you get it anyway. Then you end up spending all your spare cash on running costs and repairs, only to turn around and buy a sensible Hyundai a few years later lesson learned.

It can also be trying to live a life you simply can't, whether that be clothes, apartment, car, whatever. A good job doesn't mean you're rich.

#2 Too Much Partying

Who doesn't want to party?! There's so much to celebrate, not the least of which is the fact that you can make it on your own with your new job and sense of freedom. But much the same way as you can over spend on materials things, so to can you commit to a life of partying that won't help your bank balance.

It's fine for a little while, but if you continue too long then you will regret it later, that is a certainty.

#3 You Don’t Know Your Cash Flow

This would seem simple since, in your early 20s, most people only have one source of income, so monitor that and you'll be fine, right? Well, not so simple, I'm afraid.

Why? Well, when you're just starting in this phase of life, the sense of freedom may lead you to commit to regular debits from your account to the point where there could be more going out than there is coming in.

You need a budget.

#4 Retirement Savings

It's way too early to start thinking about retirement already! I'm still not even half way done with my first decade of employment!

Wrong. The truth is that many financial experts are suggesting that if people don't start planning ahead for retirement now, there'll be no actual retirement to look forward to!

#5 You Don’t Plan For An Emergency

Things can happen. Things do happen, especially in your 20s. Many young people just think that i there happens to be an emergency to take care of and it will cost them money, just leave that for the credit card to take care of.

The problem with this is that you still need to pay that credit card off at some point. What if the emergency means you can't work? Then what will you do? The interest won't stop mounting on the credit card just because the emergency wasn't your fault!

#6 Speaking of Credit…

You're going to want to establish a credit score; a number between 301 and 850 that shows businesses how you are at repaying debts. Any lower than 650 and you'll begin to look a bit shaky and untrustworthy.

Get a credit card, but get the right one a good one, and then use it wisely. This will assist you later on in life when you're buying big things like a house, etc.

#7 Leaving Your Debt

This is a pretty simple one to understand. If you leave your debt, you'll be charged interest and the whole point of money and your relationship with it will be counter-productive.

Be aware of your interest rates, pay student loans, etc. Do it.

Do it!