Seven Mistakes Most Twenty-Somethings Make (And How to Avoid Them)

As astounding as this may seem to you, the choices you make today can have a lasting effect tomorrow. Don’t be like most twenty-somethings and fall into the same traps. Check out the seven mistakes most young people make and what you can do to avoid them.

Living Beyond Your Means

Congratulations! You made it past your teens. While most twenty-somethings have an idea of what they want to do, it’s still a time of transition and change. And though it may not quite pan out the way they want, most twenty-somethings also have concrete plans for the future. One of the most common (and easiest) mistakes people make in their twenties is living beyond their means. Putting a down payment on a house they can’t afford, buying an expensive car they don’t need, even shelling out big bucks for the same designer clothes your friends or co-workers have are easy ways to fall into debt . Trying to live above your income range only sets you up with a debt load you’ll have to deal with for several years.

Not Budgeting

Living without a budget could mean you come up short of money each month. Take time to devise a budget that fits your income. Look up costs of living in your area and adjust your budget accordingly to account for the cost of housing, food, transportation, etc. Need help setting up a budget? No problem! BudgetSimple is a free and easy way to keep track of your spends, which will in turn help keep you out of debt .

Not Setting Aside an Emergency Fund

Although you are young and probably feel invincible, something could happen that might quickly deplete your savings. You should set aside a set amount of money each month for an emergency fund—it doesn’t have to be a large amount, as fifty to one hundred dollars each month is at the very least a decent start.

Getting Deep in Debt

If you feel like you can't get ahead due to outstanding loans or credit card debt, you’re not alone. The average debt of a four-year college graduate today is near $30,000, and that’s only including student loans. If you're looking to fight off your burden of debt, a credit specialist from CreditGuard.org can help advise you on how to manage and pay off your debt in the most timely and efficient manner.

Thinking You Don’t Need Life Insurance Yet

Life insurance is less expensive when you're young and healthy. Compare policies to find one with living benefits that can help you later in life—it’s never too early to prepare for the worst, especially for those with spouses and children.

Not Planning For Retirement

Even if it's hard to think about retirement when you're still paying off college loans, it's something you should begin planning for. It's best to consult with a financial planner who can help you begin preparing for your senior years.

Letting Opportunities Fall by the Wayside

There are mistakes you can make while in your twenties that do not relate to money but that still affect your future. This is an ideal time in your life for you to seize the many opportunities that will come your way. If you let opportunities go by, they may not come your way again.

Your twenties are a chaotic time, especially when you're trying to strike a balance between following your dreams , exploring new ideas and finding your place in life. The best way to survive it is with good planning, smart spending and an open mind.