Top Money Mistakes That Young Adults Make
When you’re in your 20s, making regrettable financial decisions may be the last thing on your mind. After all, you’ll never have a better body, higher libido, or bigger dreams than in your starry-eyed youth.
Living Off Student Loans
Taking out as much as you can in student loans is easy. Paying those loans off, not so much. It’s a bad idea to apply for more money than you need so you can buy a car, study on better furniture or live in an off-campus apartment.
1
Failing to Repay Student Loans
If you’re behind on student loan payments or in default, your financial problems will only get worse if you don’t work out an affordable repayment plan.
2
Ignoring Your Credit Score
Allow your credit score to drop below 580, however, and you’ll have poor credit, always at the mercy of high-interest creditors eager to prey on your desperation.
3
Choosing Bad Roommates
Your best friend may be a blast for a night of clubbing, but will she pay rent on time? That guy from school plays a mean game of basketball, but can he hold down a job? Pick a deadbeat roommate and you could pay for it later with your credit score.
4
Neglecting Emergency Savings
When you squirrel away money into an emergency savings account, you’ve got money to cover car repairs, medical bills, veterinary costs, home repairs, and other unexpected expenses that you’d otherwise have to charge on credit cards.
5
Overlooking Retirement Fund Opportunities
Beginning to save for retirement in your 20s is smart, since you’ve got decades ahead to build your retirement account. If you’re not taking advantage of an employer’s 401K benefit, especially if the company matches your contribution, you’re missing out on big earnings.
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Slacking on Financial Goals Want to travel the world, buy a house, have kids, get married or just be financially secure later? Setting financial goals in your 20s motivates you to turn dreams into reality.
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