10 Money Mistakes Most People Make in Their 20s (And How to Avoid Them)
Your 20s are full of firsts—first job, first apartment, maybe even first time managing your own money. And let’s be real: no one hands you a financial roadmap when you become an adult.
That’s why today, we’re covering 10 common money mistakes people make in their 20s—and more importantly, how you can avoid them.
💸 1. Not Budgeting At All
It’s easy to spend without tracking where your money goes. But ignoring your spending is the fastest way to feel broke—even if you’re earning.
Fix: Use a simple budgeting method like the 50/30/20 rule and track spending with apps like Mint or You Need a Budget (YNAB).
💳 2. Racking Up Credit Card Debt
Credit cards can be helpful—if you use them wisely. But many people in their 20s fall into the trap of only paying minimums, leading to massive interest.
Fix: Only use credit cards for planned expenses, pay off the full balance monthly, and never treat them like free money.
🛍 3. Living Beyond Your Means
A new paycheck might tempt you to upgrade everything—apartment, wardrobe, tech. But lifestyle inflation can keep you broke, no matter how much you earn.
Fix: Keep your core expenses low and increase savings as your income grows.
💰 4. Not Building an Emergency Fund
Emergencies aren’t a matter of if—they’re a matter of when. If you’re not prepared, a single issue (like car trouble or medical bills) can wreck your finances.
Fix: Aim for $500–$1,000 to start, then build to 3–6 months of expenses.
🕰 5. Delaying Investing
A lot of people think they need a lot of money to invest. Not true. The earlier you start—even with $10—the more time your money has to grow.
Fix: Start small with index funds, or use micro-investing apps like Acorns or Robinhood.
🧾 6. Ignoring Student Loans
Ignoring your loans won’t make them disappear—it’ll make them grow. Many grads delay facing their debt out of fear or confusion.
Fix: Learn your loan terms, make a plan, and explore income-driven repayment or refinancing if needed.
🧠 7. Not Learning Basic Financial Skills
No one is born knowing how to manage money. But if you don’t learn the basics, you’ll keep repeating the same mistakes.
Fix: Follow finance blogs (like this one!), read books like “I Will Teach You to Be Rich”, or listen to finance podcasts on the go.
📉 8. Not Tracking Subscriptions
From streaming to gym memberships, subscriptions silently drain your account. And chances are, you’re not even using half of them.
Fix: Audit your subscriptions monthly and cancel what you don’t use.
👯 9. Trying to Keep Up With Friends
It’s tempting to match your friends’ spending on vacations, brunches, and shopping—but you don’t know what’s really in their bank accounts.
Fix: Set boundaries and don’t feel guilty for saying no to spending that doesn’t align with your goals.
🧾 10. Not Setting Financial Goals
If you don’t have a goal, you’ll drift. Whether it’s saving for travel, paying off debt, or building a business—clear goals help you stay motivated.
Fix: Set one short-term and one long-term financial goal this month. Then build a plan to get there.
🎯 Final Thoughts
Your 20s are the perfect time to start getting your finances right. Don’t beat yourself up if you’ve made some of these mistakes—we all have. The key is starting now and making small, consistent improvements.
Stick with The Finance Fix, and we’ll help you do just that.
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