When you’re fresh out of college, saving for the future is tough. But knowing how to manage your money wisely in your early years can have huge long-term payoffs.
Money can be a taboo subject, at least it is a sensitive subject that is not always easily discussed in the family.
In fact, when young people have a certain financial freedom, they do not always have the right levers or the right reflexes to manage their money .
Whether you have had these discussions or not with your entourage, here is a little warning including the 20 mistakes not to make at 20 in terms of money !
Money, a tool that we are supposed to grow
1 – Thinking that money is easy to earn
This is one of the main mistakes of people starting out in the professional world: the impression that the money is flowing!
It’s no wonder when you’ve been used to living with your parents and only paying for “leisure” things.
This is why starting to work as young as possible makes it possible to realize that money goes faster than it comes in!
2 – Take out student loans
Unless the study project is solid (departure abroad, validation of a prestigious diploma), it is preferable not to take out a student loan.
Many are tempted by seeing in them easy money for studies, but it is a big mistake: you benefit from it for 2 years, but spend 15 years reimbursing these expenses.
3 – Not tracking or planning your expenses
One of the most common mistakes among young and old is to spend lavishly. At least, without following the stream of expenses.
It is essential to check that your expenses have been collected correctly, if only to detect if you have an overpayment, an unusual charge, etc.
4 – Not having a monthly budget
To spend lavishly is to spend without respecting one’s budget.
However, a monthly budget is the best way to finance your projects: by deducting your taxes and fixed charges from your income, you are able to see the available money you have left. From there, you can save and start seeing your future.
5 – Go into debt stupidly
Here, it is not a question of getting into debt only with banks, but also with friends.
It is not difficult to find yourself in a situation where you lack a little money, but where your friends go out for a drink.
Getting carried away by asking a friend to “advance” you the sum is a toxic attitude that shows very poor financial management. We spend when we have, that’s all.
6 – Spending without having income
Being tempted by a purchase or an outing without having the means to assume it is a common mistake among people in their twenties, who think they have time to repay later.
It is essential to respect the principle “I buy if I have the money in my bank account” in order to avoid excesses and possible indebtedness.
7 – Not looking for bargains
The twenties are the ideal decade to take advantage of promotional offers, both on banking products and in everyday life.
Rather than being satisfied with what you have, why not seek better, or learn how to negotiate?
8 – Refuse to ask for help
Thinking that you can get by on your own at 20 is very arrogant.
Especially since, in 90% of cases, a surety or an external guarantor is necessary for the first apartments or investments. See money as a sign of confidence.
9 – Thinking that work will come later
At 20, we worry little about the future, thinking we have time for it.
But the years pass quickly and finances dwindle quickly, looking for a job from the legal age, founding your own business, all this allows you to quickly learn the values of work.
10 – Not having emergency money
Whether it’s 20 or 50, living without relief money can be dangerous.
You always need to have a financial “safety cushion” to cover unexpected events, such as an additional tax.
11 – Not having an appointment with your financial advisor
For many, this is something that is reserved for people who already have substantial funds in their account, but it is not true.
Money, finances, is something to be prepared, to be discussed: if you can’t do it with your family, talk about it with your adviser, to unlock future projects.
12 – Do not develop life projects
Living is based on projects. Without a minimum of money, no projects. It’s as simple as that.
13 – Spend without moderation
This is different from lavish spending. Spending without moderation implies a form of impulse, almost uncontrollable.
It’s a mistake not to make to stay afloat and live your projects to the fullest.
14 Acquiring and consuming without a specific purpose
At 20, you need everything, but at the same time nothing. Investing in non-concrete things can quickly seem exciting, such as hobbies or restaurants.
But acquiring or consuming aimlessly will not get you ahead in life, and will only hurt your finances.
15 – Not having a long-term financial vision
Besides the investment, it is important to know how you envisage your finances in the long term, what are your objectives?
What do you wish to accomplish? How do you see the future? It is a real proof of maturity.
16 – Do not invest quickly
As soon as you can and have a stable situation, consider investing in an apartment or in concrete in order to build up your assets. The latter will also be your “safety cushion”.
You must also invest in yourself by favouring constant learning!
17 – Not thinking about retirement
Young people are certainly present, but retirement is not won in a day.
Did you know that by putting $50 a month aside from the age of 20, you could live 5 years without needing additional income from the age of 60?
The figures speak for themselves: save!
18 – Not having spending rules
“Spend what you have” is one of these rules.
But it can also mean limiting your spending on clothes if you like shopping, avoiding buying coffee in the morning on the way to work to save money.
It’s up to you to find your rhythm to manage your finances.
19 – Avoid talking about money with your other half
Whether you make your life together or not (you may not know this yet), money is a taboo subject.
It is so much that it becomes almost mysterious, we no longer dare to approach it for fear of offending each other.
However, talking about money is the basis of a relationship: without trust and without precise rules, the future will not be very rosy.
20 – Not being realistic about your situation
Many young people veil their face regarding their financial situation.
Rather than resorting to the easy way, prefer to choose the path of stability and consistency by adopting a realistic posture vis-à-vis money.
Earn it first, then spend it with real maturity.
Your turn NOW!