Three Money Mistakes You're Making In Your Twenties

As twenty somethings we are just finally getting our feet wet with real jobs and making real money. But now, what are we suppose to do with it? Click through to make sure you are not making these three money mistakes in your twenties!

Truth be told the mistakes I'm talking about today can be made at any age but I think during your twenties is when you start to make these mistakes. Especially because you start to make a little more money than you did at your high school job.

It's also the perfect time to learn to stop these spending mistakes before they become habits. If you do that, you'll have set yourself up for financial freedom in the future.

Now let's get to it shall we?

Three Money Mistakes Your Making In You're Twenties


Now I've talked at lengths about why you need a savings, and how to build one. By now, you probably think I'm hitting the dead fish. (That's a saying right?) But I'm listing it again because it can't be left off a list of money mistakes made in your twenties, it just can't be.

So you've done it. You've got that job that pays some real cash money, finally.  Your so excited that you finally have a steady "grown up income" that pays the bills and then some.

So what do you do?

Well, you start living the high life! Going out with friends, buying that dress from that store you never went in before because it was way out of your price range. You feel free because you know that at the end of the month a big chunk of change will be dropped again into your bank account and you will be able to start all over next month.

Because of that constant flow of money, (so it seems) you don't bother putting any aside. Why have a savings when you can go on a fun trip now and just use next months money if something comes up. Or use a credit card knowing you'll have that money next month and pay it off!

I can't tell you how wrong this mentality is.

Now, I'm all for having a celebratory dinner or shopping outing when you get your first paycheck. But the spending party has to stop eventually.


Because things you think will never happen in life do happen, and you need to be prepared for them.

You could lose that job. Lose that promotion. Your car could get totaled. You could get incredibly sick and have medical bills and a leave of absence from work. You could end up hating the job and want to quit but you don't have any money to fall back on or you've created a lifestyle that needs that job's amount of money to survive.

You are not in control of some things in your life, but how you prepare for those things you are in control of.  Having a savings does just that, prepares you.

So save yourself some heart ache and just do it okay! ;)


Now this one is very similar to mistake one. Obviously if you are not saving any money than you are spending it, and if you are spending it all, I can almost guarantee you are spending more than you need to.

The biggest mistake I see so many people making is when they get an increase in income, (a new job, a promotion, or just a pay raise) they increase their spending accordingly.

Unless you are just barely scrapping by, and I do mean scrapping, (i.e. can't have the heat on, little groceries, and no extras like cable, large phone plans, etc.) there is no need for you to up your spending when your income gets increased. You were living perfectly fine before why do you all of a sudden need more just because you can afford it?

You don't need a bigger house, a newer car, phone or tv. Be content and peaceful with what you have. When you get a little more, add that to your savings, or even to a trip fund, (assuming you already have a good chunk in your savings) put it towards your kid's college, or a few extra dollars to pay off your house!

When spending your extra money on something ask yourself if "future you" would benefit from this. In your twenties most of your life is still ahead of you, start helping "future you" out! That coffee this morning, or new car with a car payment is not going to be helping "future you" out!

Don't put that stress on you or "future you". ;)

Psst. If you want to learn how to cut back your spending see the bottom of this post! :)


I know, you are probably thinking, umm why is more money a mistake?

Let me explain.

Now, if you are in your exact dream job and loving every single second of it, jumping out of bed each morning and wanting to stay late working everyday, well then, I'm not talking to you.

But if you are like most of us, who are working because we have to, then hear me out on this point.

A lot of people think that more money is good and allows you to do more things in your life. Therefore, you should work your typical 40hr work week at the highest job you qualify for and spend your weeknights and weekends doing the things you want to do.

While I totally agree that more money gives you freedom in your life, to take trips, pursue dreams, have days off, and enjoy your family, I don't think the answer is to work more.

The answer is to manage your money better.

The key to having financial freedom is not in how much money you make but what you do with the money you make. There are so many people out there that have high paying jobs that they are tied to because as they started making more money they started spending more, they bought the bigger house, bought the nicer clothes and gave their children more and more.

Now what do they do as their kids are growing up? They work long hours to pay for the life they've built.

In your twenties your goal should not be to work more to get more money. Your goal should be to become financially independent so you are not tied to your job in years to come.

Obviously you'll have to work a majority of your life, (unless you do what these people did and work every extra hour they could and retired at age 30) but that doesn't mean you have to be tied to that job most of your life. If you manage your spending and build up your savings (which can eventually turn to building up your wealth) you will be able to take vacations, days off, and pay for all the necessities at the same time.

You won't have to work the long hours or do whatever you have to do for the promotion with more money, you will have created the life you want with the money you have! Working for money is never going to give you freedom, but making your money work for you, will.


Now, I do encourage you all to find what you love to do and how to make money doing that! That is the ultimate dream! But, even if you haven't done that yet you can still have a life and follow passions outside of your work, but you have to set yourself up financially first in order to do that.

The only reason I can be here right now writing to you is because I had money saved up to get me by until my next job. Put yourself and your future first, by putting your finances first!

Good luck!