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Highlights
- 20s is the time, which can either build or break a person’s financial future.
- People enter the real world in their 20s and if the right steps are taken at the right time, the 20s can become the most prosperous years of one's life.
- Thus, one should be cautious of the below mistakes and learn how to be financially literate to make the most rational decisions.
Undoubtedly, 20s are the most crucial years for anyone. People ideally get off of their academic life and step into the real world. Stepping into the real world implies one gets a job and starts managing their own finances. However, this transition might get difficult; and in this journey, many people commit their biggest financial mistakes.
Image source: Pixabay
Transition into adulthood
20s is the time people transition into adulthood. What does it mean? - one is financially independent and free. People don’t realise the responsibility that comes when one starts earning. You have to pay your own bills; you have to plan for your future, and you also need to live your life to the fullest!
So, balancing the three is significant. However, mostly people fail in balancing these, and end up committing the biggest financial mistakes that have a long-term impact on their financial growth, future prospects and safety.
GOOD WATCH: Mistakes People Make Paying Off Debt
Following are the biggest financial mistakes to ignore when you are in your 20s.
- Not saving and simply spending: This is the biggest mistake that people commit. It is always recommended to start saving the moment one starts earning. The optimum way is to at least save 20% of the salary per month.
- Not investing: People take their 20s lightly and spend most time partying and chilling. However, this is the most crucial time to build your financial stability. Thus, one should start investing as soon as they start earning a stable income.
- Living on credit cards: In the present world, buying extravagant things on EMIs is a common phenomenon. That’s what people do, get N number of things either through credit cards or on EMIs and end up having tons of credit card debts and other outstanding bills.
Image source: Pixabay
- Taking an education loan when you are not sure about the course: This is also common, people plan to study more in their 20s, without being sure if they really want to do that course. They seek a loan and end up paying tons of interest rate for something which didn’t give them optimum results.
- Not setting future goals: Everyone likes living in the moment in their 20s, it’s like a thing. However, planning for the future and setting long term goals is equally significant. It saves your future hustle and helps in building a safer future for you and your family.
- Not availing financial literacy: This is one of the most common mistakes, especially in third-world countries. People start earning but they do not seek efficient financial literacy. Financial literacy talks about how much to spend, save, how to invest, plan and manage finances, etc.
ALSO READ: Planning retirement? Avoid committing these 5 mistakes
Bottom line
20s is the time, which can either build or break a person’s financial future. People enter the real world in their 20s and if the right steps are taken at the right time, these 20s can become the most prosperous years of one's life. Thus, one should be cautious of the above mistakes and learn how to be financially literate to make the most rational decisions.
