Money mistakes we make in our 20s
How to take control of our money and keep living our best life while saving
Image: Pinterest & @annaewers
It feels so good seeing money in our bank account that it immediately tempts us to start making plans about how we are going to use it! Sometimes we don’t always come up with a good stratégie for those plans. Afterwards, it turned out to be a big financial mistake that we regretted making. Don't worry, there is always a solution to every problem.
Indeed, the most important thing is to know how to fix it while keeping on living our best life! The goal is not to stop us from spending our money but to enjoy ourselves while saving money.
Financial mistakes we all make:
Buying a new car using a bank loan when we can buy a second-hand car - until we have enough money for a new one. Be careful when you buy one, don’t choose a broken one that will cost you even more than you could’ve imagined.
We may not realize it but a car is expensive: maintenance, technical inspection, gas (whose price is constantly rising), washing…It's almost like we are taking care of a baby.
You should know that once you drive a car, its value decreases. Indeed, not having car payments is fantastic. For now, you can buy an affordable and reliable one. This will help you save a lot of money.
Buying cheaper costs us more because we buy quantity over quality. As a result, our purchase lasts for a few months and then we have to buy another one.
Not saving for your pension: You have to do this yourself in addition to your company's contribution. Your pension is your investment!
Not having life insurance: It protects against life and travel injuries and emergencies...
Avoid using applications like Klarna. It is like a rope around your neck because it’s a kind of loan.
Mini luxury bags: They are beautiful but not practical. If you can't put your keys or phone in it, don't take it! or it’s not worthy
However, if you can't buy it twice, it means you can't afford it. If you like luxury bags, you should invest in timeless ones that will increase in value over time. Some are even worth more than houses. But I will say it again: if you can't buy it twice, it means you can't afford it. JayZ said it so please don't come at me! Not investing
Not having a budget: a budget planner/sheet will allow you to have a clear vision of your expenses and especially to know where your money goes: shopping, bills, leisure activities...It will also help you to see how much money you have left for a specific project or to buy something you enjoy.
Don't rent a flat that costs you almost your entire income. Your rent should not exceed one-fourth of your monthly net pay.
Money tips:
Pay yourself every month (savings)
Apply the 50-20-30 rule : 50% on Essentials/Needs (bills…) - 20% on Savings - 30% on wants/everything else. The goal is to avoid dipping into your savings.
Have an emergency fund: you never know what might happen. Life is so unpredictable: pandemic, disease, moving... It’s best to have one for at least 12 months but you can start with 3 or 6 months.
We learn by living and making mistakes and we need to stop beating ourselves up about it. Mistakes help us to move forward much smarter. The most important thing is to be more intentional about our finances in order to be in a better position, financially.
In a future article, I will share with you some budget examples and spreadsheet templates. Stay tuned.
